Tales of the Rampant Coyote

Adventures in Indie Gaming!

Shocker! Retail Game Sales Decrease, Digital Game Sales Increase!

Posted by Rampant Coyote on June 16, 2011

Who woulda thunk, huh?

So almost a quarter of game sales are now through digital distribution. When that number exceeds 50%… well, you are already seeing interesting things happen, you will just see more of it.

I suspect that for PC games, that number is even higher. Rock Paper Shotgun opines, “You might still be able to get a cheap boxed copy from a mail-order outlet, but the chances are you won’t find PC games at all in the shops at all. And as far as PC developers are concerned, digital is all. Retail is over. Which reminds me, I really must write that thing about Steam’s hegemony…

It’s been both a blessing and a curse. Yes, digital distribution has also been the bane of PC gaming, making piracy ridiculously easy compared to the bad ol’ days I remember when it was done through cracked copies burned on CD-ROMs, and before that copied onto floppy disks. As a side note, I remember talking to someone at Origin circa 1991 about getting a job with them, and being told that they were considering CD-ROM to be the future of the industry, because they were impractical to pirate. Hah! That lasted maybe a year after CD-ROMs became a dominant distribution medium.

But now games are freed of physical constraints all but entirely. Yes, it means pirates have a field day, and its overwhelming presence makes it much harder to profit – or even break even – on a game. But it also means that the stranglehold of the gatekeepers is – well, not destroyed (see the above comment about Steam’s hegemony), but definitely weakened. It means the barriers to entry imposed by distribution have been practically eliminated. It has effectively made each sale more profitable, and as a counterpoint has probably done a bit to keep game prices down.

And it means indies can exist in a significant form.  And you’d have to be living in a cave to not recognize that indies have become a major influence on gaming today.

Another concern of mine is that the boundless new medium dictates or restrict the kinds of games being made. I love how it’s made things like social gaming and mobile gaming possible. But as a player, I don’t want to be marooned by developers (as I already have been in many game genres I have loved…) as they race off on the latest gold rush. Solo games, according to folks like Richard Garriott, are obsolete relics of a previous era.

But I’m not overly worried. The more open medium has provided a solution to it’s own problem: Indies will come to fill the void. They’ll find ways to make it work. The old brick-and-mortar model is dead, but the old style of games that thrived during that era doesn’t have to be.

Filed Under: Biz - Comments: 13 Comments to Read

  • sascha said,

    It is unwise to rely on one technology! Imagine the whole Internet has a global outage one day (due to world armageddon or whatever) … Zero! No game selling anymore! Then the day has come where you wish your cozy retail stores back! 😉

  • Andy_Panthro said,

    The constant increase in quantity and quality of indie games means the death of the high street PC gaming market matters very little.

    I’ve played more hours of games from smaller publishers and indie developers this past two years than I have from large publishers, and I see that trend continuing.

    The main issue with the loss of the high street is distribution. Internet services are not quite in place everywhere, but they are growing each year. Two things stand in the way – infrastructure and law.

    Even in the UK, internet access is in an awkward position. Inner cities have generally got good access, whilst rural areas are poorly served due to infrastructure costs. From that perspective, an increase in the speed and availability of mobile internet will help things enormously.

    The issue with law is the conflict between local and international laws, and that raises other problems. Despite the perceived international nature of the internet, it is often regionally restricted for various reasons. Digital distribution is no exception, and although places like Good Old Games provide the same service around the world, other places alter pricing or availability by geography. Of course this is often related to the boxed copies sold (or not) in the respective countries (Such as Austrailia and The Witcher 2, for example).

    Thankfully indie games often counter both points – firstly many are smaller in size so that even a meagre internet connection can download them, but also they are far less likely to have regional restrictions imposed upon them.

  • LateWhiteRabbit said,

    With the rise of digital distribution, publishers really need to rethink the “region lock” mess. What reason is there to let one person have a game a week earlier or later when they are receiving from the same simultaneous source – one is just arbitrarily prevented for utilizing it.

    Steam definitely has a near default monopoly on the PC digital distribution side, at least for mainstream titles, but, to put it bluntly, it is because they are the best. If others want to compete, they have to be better.

  • Calibrator said,

    Andy, in Germany it’s the very same story: People living in rural areas often have no DSL connection, sitting at 56Kbit or ISDN (64Kbit). These folks could mail order stuff of course and we’ll see how long this will be an option. Alas, if you order a game that is rated “18” (“mature” for US readers) then you have to pay extra for the postman checking the age of the receiver (you!). This makes games often more expensive than in retail stores…

    Apropos retail stores: Yesterday, I was in our local “Media Market” subsidary and because of the recent discussions here I checked the games department more thoroughly. I have to confess that I buy most mainstream games boxes online, too, or wait until the games are offered on magazine cover disks.

    What I noticed was this:
    PC games are already under-represented, compared to the various console games. I’d estimate that there were only half as much stuff as nine years ago.
    Add to this that it now is located in the shabbiest corner of the store, with two half shelves (one with new stuff, the whole second half with budget software like Ponyfarm and all those “Spot the…”-games.
    The space that got freed by shrinking the PC section was clearly devoted to consoles and mobile consoles (=Nintendo DS and 3DS) and for several stacks of special games console sales (console bundled with a game, console bundled with plastic guitar, …bundled with Kinect or Move etc.).

    In the PS3 and X360 section I also noticed that they alotted one entire slot per game (=five boxes of the same game in one slot, for example), whereas in the PC section most games were sorted like CDs or DVDs, in sequential order.
    This means that if you were searching for a console game you could simply wander down the aisles and keep looking at the shelf. For PC games you have to search with your fingers and there is often only one box for a given game. This is complicated by the various sections (action, adventure, RPG – now where to find this new action-adventure? hmmm). Obviously you have a harder time, finding the PC game you want (except it is very new which brings it to the front).
    It’s as if the store owners think that console gamers are either too impatient or too dumb to find what they want.
    It also obviously means that console games are indeed *physically* shallow… 😉

    The market is of course not punishing PC gamers with this small section – they only react to what the audience votes with their wallets.
    Therefore I don’t think that PC games vanishing into cyberspace is not an “if”- but a “when”-question.

    Ah, and don’t worry about the stores: I also noticed that their hifi section is shrunk in about half, too, given that most people seem to be content with their iPods and several mini amplifier/speaker options.
    What got into that space? “White wares”, which means kitchen appliances in Germany.
    Interesting product development in a “media market”, for sure…

  • MalcolmM said,

    In Canada, PC games are very difficult to buy at retail stores. We have Electronics Boutique (Gamestop), but they only have a tiny selection of only the most popular PC titles, plus quite a few older titles that have been collecting dust for months, or years.
    Best Buy/Future Shop also only stock the most popular titles. I use to buy almost all my games from them, but stopped once I switched to Steam over a year ago. I would almost never seen anyone even checking out the PC games at BB/FS.
    Steam is great for me. Not only is it more convenient, I get access to almost all the PC titles that interest me. And of course the Steam sales mean I don’t spend as much as I use to on games. Hopefully more of what I spend goes to the developers.

  • Rampant Coyote said,

    Yeah, this is the case in the U.S. (at least in my area) as well. Once upon a time, many years ago, I remember Electronics Boutique at the mall being almost all PC games. What wasn’t PC games was other PC software. You’d go to a toy store or department store for console “cartridges.”

    Nowadays – PC games are the ghetto in brick-and-mortar game stores. I’m trying to remember the last time I bought a PC game from a local store – I think it was at a going-out-of-business sale for Circuit City.

    I gave up trying to buy PC games in stores a few years ago after attempting to buy… what was it? Oh, I was looking for the newly-released IL-2: 1946. Nobody had it, even after it had been out a week. I was in one game store, and found that their entire PC game selection consisted of about a dozen titles on a little section of wall next to the cashiers. There was a bigger section for used games for an obsolete console than for the PC! I finally bought a physical copy online, and gave up going to the stores to look for PC games.

  • Xian said,

    I think Oblivion was the last title that I picked up at a brick and mortar store. These days I get any physical media from Amazon, and most digital downloads from Steam.

    I turn to Amazon for console games as well, since having some bad experiences at Gamestop – once buying a Nintendo DS game for my daughter new but when she went to play it there were already saves on it, so it was obviously used and another time that my son had bought a game and took it home only to have it ask for the second disc which wasn’t in the package. Gamestop made good in both cases, but they lost me as a customer. Now that they have bought Impulse, they may get my business again through them.

    I like the instant gratification from buying online, but I do miss having the physical manual and things like the cloth map from the Ultimas for example.

    My biggest complaint with Steam is the lack of live support. For a company with a stated figure of over one billion dollars in sales, they need to invest some of their profit into live support. There needs to be someone to talk to when you have an issue – not just an email address and a message that we will get back to you.

  • skavenhorde said,

    I buy constantly from brick and mortor shops because I like the person who works there. She gives me a discount and it is always a little cheaper to buy games here in Taiwanese Dollars than it is if I bought online. I don’t see Taiwan’s Brick and Mortor shops disappearing completely any time soon. We are a little slow with changes around here and a little stubborn to the type of media that Taiwanese want.

    We’ll see though. Maybe in about 5 years or so this might change. It would be a sad day since one of the only reasons I head back to Taipei is to go and visit my fovorite shop.

  • Xian said,

    Just got bitten by the very thing I was complaining about in my earlier post – no live support with Steam. I was going to try to finish Portal 2 this weekend and it has vanished completely off my Steam All Games and Installed Games list. I can browse to the executable that is on my hard drive and run it, but when I go to load my save game from the title screen I get a validation error. I am waiting now to get an email back. This is the one thing that really makes me nervous with digital distribution systems and their DRM. I have over 100 games on Steam and to have one disappear without warning does not leave me with a very good feeling. I would hate for the rest to follow suit.

  • Rampant Coyote said,

    See the above comment about “The Steam Hegemony.”

    The majority of the digital games I purchase do NOT have anything like Steams DRM / Cloud Save system / whatever to go wrong. Indie games, games on GOG.COM – and (at least for now) the games I bought on Impulse — it’s no problem.

    Thanks, Steam, for giving digital downloads a bad name…

    (Okay, yes, Steam’s probably done more to popularize digital game distribution than anybody else, too, I just don’t want them to monopolize things.)

  • xenovore said,

    Steam has worked flawlessly for me — games are always available and playable. It’s become my primary source for game acquisition.

    And no, we don’t want Steam to become a monopoly, but…

    Every time I see another publisher (EA) open up an online store, I’m like, Really?! Another place that I have to register and provide personal info and a credit card number (for the hackers to acquire down the road)? And they’re probably going to completely suck compared to Steam??? (GfWL, I’m looking at you.)

    Forget about it, I’m sticking with Steam, and if the game I want isn’t available on Steam, I’m very likely not buying it.

  • Tesh said,

    I detest it when a game platform requires I dial the mothership to play a game that has no online component. That’s why I’m always happier to get a game via GoG.com than nearly any other online vendor.

    Still, Steam sales for $5 and a mostly-working “offline mode” means I can try out games I’d not otherwise bother with. Impulse works pretty well, too. For that price point, I can live with a little inconvenience when my internet goes down. I have other games to play.

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