14 DAY TRIAL // Video games are becoming more and more popular these days, and retail companies that sell them are making huge amounts of money. But a part of that money is no longer going to big name retailers like GameStop or Target, as gamers prefer to download their titles right at home, by using either Steam or Direct2Drive for the PC platform or the Xbox Live Arcade, PlayStation Network or Wii Channel for consoles.
Although only 17 percent of games sold in 2008 for PCs were in the form of digital downloads, according to the NPD group things are certain to grow in the following years as people will become more open to downloading games just like any other content from services like Netflix or iTunes.
This opinion is shared by Wedbush Morgan Securities analyst Michael Pachter, who has estimated that roughly 2 percent of industry sales this year, or 400 million dollars, will result from digital sales. He also expects the amount to double in the following years, to 800 million or 1.6 billion by 2011.
“As broadband penetration increases and the Internet connection migrates to the living room, downloads or cloud computing solutions will become much more viable,” he said. “Downloads will become 20 percent of the market within five years, and probably peak at around 50 percent of the overall market in 10 years. This assumes an overall market growth of 5 to 10 percent annually.
His statements are backed by the fact that the NPG group is estimating that 18 percent of Xbox Live Gold subscribers regularly download titles from the Xbox Live Arcade, while 10 percent of PS3 users buy new titles from the PlayStation Network.
With the trend set only to increase over the years, thanks to the easiness with which promotions can be set into motion and the fact that it allows players to play the game easily, digital downloads will become something normal in the near future.