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Digital Distribution to Surpass Retail Sales in 3 Years?

Posted October 7, 2009 by James Brightman

If digital distribution is the wave of the future, you certainly wouldn't know it from the way certain sectors are reacting to Sony's PSPgo. Nevertheless, the consensus from most in the industry is that there will indeed be a transition from boxed product to digital product and goods as services. Speakers from the upcoming the London Games Conference, which takes place at BAFTA on October 27, believe this "seismic shift" will happen faster than we think.

Digital distribution is expected to outstrip traditional retail sales within three years according to a consensus of speakers at the conference, and it's believed that around 40 percent of game companies are simply not prepared for the rate at which this will occur. Nick Parker, of Parker Consulting, said that Microsoft and Sony are likely to launch their next-gen consoles in the 2013-2014 time period, and consequently starting in 2010 traditional boxed product sales will begin to fade, while digital distribution and online gaming help to partially offset the shortfall during this transition period.

“For the first time ever, the games industry has a way of alleviating the pain that traditionally befalls it during generational decline, through online gaming in its many guises – it’s a genuinely exciting time for the industry and the London Games Conference is perfectly timed to discuss these opportunities,” said Parker.

The ELSPA supported London Games Conference will feature speakers such as Mark Gerhard from Jagex, Kristian Segerstrale from Playfish, Nick Pili from Sega, Pete Edwards from PlayStation Home and Neil Thompson from Xbox. The opening address will be given by Ed Vaizey, Shadow Minister for Culture.

[Correction: we initially attributed the three years quote to Parker, but that's a conclusion the London Games Conference made after surveying a number of speakers.]

James Brightman has been covering the games industry since 2003 and has been an avid gamer ever since the days of Atari and Intellivision. He was previously the EIC of GameDaily Biz.

2 Comments

THE 1 2 P
October 7, 2009

I still think that theres a place for both boxed versions and dlc versions. I much prefer boxed versions for the extra value of having a manual, box and disc. Furthermore, I can sell it if I ever get tired of it.

Right now I'm disappointed that I bought the Jedi Temple mission on XBL becase it will be available(with other bonuses) on the newest version of Star Wars: TFU(Sith Edition) that launches next month. So now I'll be deleting that from my harddrive and won't be able to get any money back(as far as trades go or selling it to someone else).

I think dlc is cool for map packs and extra missions ONLY when that's the only way to get it. If its going to be available in disc form a few months later for a better price, then I'll take the disc version every single time.

nickslucky
October 8, 2009

This is Nick Parker of Parker Consulting. If you read the original full text you will note that it says "speakers" will say at the up and coming London games Conference that digital distribution will surpass retail in three years. I am NOT one of those speakers. I have never given a time line for digital distribution to surpass retail but if I had it would be much longer than 3 years. Next time, please do not assume that if I am the only quote, then I supplied the headline message. Many thanks




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