The USA and Canada are two of the biggest markets in the world, but retail’s dominance is dwindling. James Batchelor investigates how publishers can use digital to help conquer this territory
THE UNITED States of America is a political superpower and no less powerful in the video games market. In a good month, games retail can
take in well over $1bn across software and hardware sales – and more than double that in busy selling periods like November. But an increasing proportion of this revenue is going towards digital titles rather than physical – a definite cause for concern for publishers and retailers. “For nearly 30 years, from the
Atari 2600 through to today’s PS3 and Xbox 360, consumers have been acquiring their console and software from bricks-and-mortar outlets,” says Geoff Mulligan, CEO of publisher Deep Silver US. “Not only is that is now rapidly changing – and
giving retail serious pause in terms of how to replace this lost revenue – but the newest generation of gamers are growing up using a mobile or portable device for their entertainment needs.”
Nearly half of the $3.4bn spent on games in the US during Q1 2012 went towards downloads.
The NPD Group reported earlier this month that nearly half of the $3.4bn taken in the US during Q1 2012 was spent on downloads. The revenue generated by a combination of DLC, subscriptions, mobile and social games plus microstractions in the first three months of the year came in at a whopping $1.38bn. “The declines in the physical
market for new physical software are well documented,” stated Anita Frazier, industry analyst at NPD. “But, a broader view of the games industry shows that other physical
content sales (the combination of used and rental) declined by just five per cent and digital format content sales grew by 10 per cent as compared to Q1 2011.
“While the growth in digital format sales does not yet offset the declines in physical, clearly the changes occurring within the industry are reflected in the trends we are seeing in the research.” Over time, Deep Silver’s Mulligan expects this to shift to accelerate, forcing publishers to go platform agnostic – not just catering for consoles, but also Smart TVs, smartphones and tablets. He even predicts consumers will be able to seamlessly switch from one device to another, picking up their game where they left off each time.