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Digital sales making up traditional retail shortfall

ERA report shows 23% growth in online sales slows market shrinkage from 9% to 3.7%

A UK sales study by the Entertainment Retailers Association has revealed the extent of the growth in digital sales, and how much that growth counteracts shrinkage in traditional retail.

This year, the report features digital sales information, gathered by Screen Digest, for the first time. That data shows a 23.1 per cent growth in the digital download market over the calendar year of 2010.

Screen Digest estimates that UK digital sales in 2010 were worth £411 million. Compare that to the £414 value of disc-based PlayStation 3 sales for an indication of the market's relative value.

That growth is in stark contrast to a 9 per cent overall shrinkage in the traditional games retail market, ameliorating that figure to a 3.7 per cent shrink overall when digital sales are accounted for. Traditional retail game sales brought in £1.529 billion in the UK last year, the report states, compared to £1.681 billion in 2009.

Handhelds showed the largest market loss in software, taking a massive 36.3 per cent (47.8 per cent PSP, 34.4 per cent DS) hit in 2010. No figures are provided for smartphones.

Home console software stayed largely stable with a 1.5 per cent loss, almost entirely in Wii sales. Both PS3 (up 16.9 per cent to £414m) and Xbox 360 (up 13 per cent to £538m) made gains whilst Wii retail dropped 29.1 per cent in value to £290 million. Boxed PC sales fell by 17 per cent in value to £78 million.

Hardware retail also continued its declining trend, with handheld sales down 39 per cent by volume and 33.8 in value. Static consoles dipped by 21 per cent in terms of units and 23.7 by unit value.

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Dan Pearson

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