David Braben: "Physical games will go away in two to three years"

Frontier CEO says investors see games industry as a "safe haven" during recession at today's Investment Summit Online

The age of physical video games is coming to an end.

That's according to David Braben, founder and CEO of Elite Dangerous studio Frontier Developments, who believes the COVID-19 pandemic has accelerated the shift towards digital distribution.

Braben shared his thoughts on the virus' impact on the industry during the opening session of today's Investment Summit Online.

Discussing changes to player behaviour during lockdown in various nations around the world, Braben noted that more and more are turning to digital video games.

"We've seen an acceleration in the transition from physical to digital," he said. "That is a good thing. It's probably two to three years before physical more or less goes away, and it's probably accelerated that timescale a bit."

His comments follow similar insight from Take-Two CEO Strauss Zelnick, who also told that he expects the pandemic to accelerate the shift to digital distribution.

However, Zelnick added: "We don't expect physical goods to go away. Nor would we like them to go away."

Following Braben's comments, publisher Christopher Dring observed that charts data shows digital sales for both PlayStation and Xbox games have increased significantly -- which is "unheard of in a year where new consoles are due to arrive."

Figures from NPD and GfK show that the US and UK markets both saw dramatic increases in sales of physical games last month.

Braben added that the surge in both sales and engagement in games experienced during the lockdown is not necessarily going to diminish completely after precautionary measures are lifted.

"We're very lucky to be in a really great industry where, from a financial point of view, things are going really well," said Braben. "Sales are up, the number of players in our games are up quite substantially, so there's that really positive side [to things].

"Some of this is actually quite sticky. We first saw this in China, where there was quite a big uplift in players during their lockdown back in February. What's interesting is we get foresight of things with China going back to work, and we do see a slightly higher level of sales still persisting than we did beforehand."

He continued: "There's a really strong silver lining here. The difficulty is you don't want to be going, 'Oh, this is all great' because we know some people are finding it hard, some people's partners have been made redundant or are struggling, so there's a balance there. But overall, it's been pretty good for our industry."

Braben also observed, anecdotally, that a lot of consumers have bought consoles for the first time ahead of lockdown, and even when the current crisis has passed, they are likely to continue buying titles for those devices.

"There's evidence that once people become gamers, they're more likely to stay gamers," he said.

A comparison was drawn between games and the other screen industries; while TV and film productions have suffered, games developers and publishers are still able to produce new content while working remotely -- and digital distribution means there are no barriers in reaching their audiences.

This is improving the opinion of the games industry among investors, Braben adds, who see video games as "something of a safe haven" when it comes to investment.

"There's talk of things being a bit recessional afterwards as well, because it might take a while for the wider world to recover from this great big blue," he says. "Historically, our industry -- and alcohol, ironically -- have always been up a bit during times of recession because we're cheap entertainment.

"So we're seen as quite a good port in a storm. There's a lot of positivity towards our industry at the moment."

The Investment Summit Online is running until 6.45pm UK time today. You can check out the full schedule here, and keep up with the live talks over at our YouTube channel.

You can rewatch Braben's session in the video below:

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Latest comments (6)

Jordan Lund Columnist 2 years ago
Thing is, people in the industry have been saying this for, what? 10 years now? It won't happen as long as people have poor internet speeds and data caps.

Ask Microsoft how the Xbox One S All Digital edition worked out for them...
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William D. Volk Founder, Deep State Games2 years ago
Here's my prediction ... if AAA goes to 100% digital distribution it will follow the evolution that mobile games followed with the app store. Free2Play will become the dominant model and games will become more like Skinner-Boxes than actual games.
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DAVID FAHRENHOLZ Software Engineer/Game designer 2 years ago
Pandemic influences do not a market make. People were forced to not only stay home but were very limited in where they could buy games or non essential items. We then need to disregard this anomaly as a trend in the market. As the article mentioned physical sales are actually up and the media is not going away soon. Many predicted the demise of vinyl and yet it has started to grow YOY 12-13% and will soon surpass the once touted sector killer CD's which has begun to stagnate. Certainly streaming in the music industry dominates due to the ease of use and the mobility of smartphones.

Gaming though, is highly dependent on internet speeds at the local level. Presently Fiber Optic, the bare minimum for streaming graphic/multi player games is only available in 25% of the USA. Of these areas that have availability as in larger metropolitan locations density of Fiber nodes is hovering between 55-61%. This is not even close to being the ideal situation for a widespread push for digital delivery or full streaming. In addition the expected ideal saturation timeline for Fiber connections is projected to be around the year 2032. Google felt they had the bases covered with Stadia but early adopters and new subscribers complain of various issues that would be expected like high amounts of video artifacts, random speed fluctuations and uncontrollable characters.

I am sure some will make the argument that we are in the 'Beta" stage but that is pure nonsense. Online gaming whether single or multiplayer has been available for decades and software developers have adapted by creating AI that uses predicative algorithms to estimate user actions to moderate bandwidth surges and lulls on the server side and preloading graphics, maps and common routines on the client side. It works reasonably well and is also highly affected by bandwidth availability at the local connection.. Online streaming may be coming, eventually, but physical media will still represent a significant portion of the market for at least a decade.
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.2 years ago
Welcome to our yearly prediction of "Physical games will go away in two to three years". Come back next when when we make the same prediction.
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Axel Cushing Freelance Writer 2 years ago
Welcome to our yearly prediction of "Physical games will go away in two to three years". Come back next when when we make the same prediction.
Coming up, the annual prediction that live service games will be the only sort of games to make money within two years. But first, our interview with Michael Pachter. You don't want to miss this one, folks!
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Sean Kauppinen Founder & CEO, IDEA2 years ago
I predict we still have physical media in 2030.
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