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UPDATE Digital Game Sales Finally Top Retail Sales

| 5 Oct 2011 18:23
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It's been a long time coming, but according to the NPD Group, retail videogame sales have finally fallen behind the intangible sale of digital games.

Update: It should be noted that the NPD Group counts game rentals and the sale of used games alongside what it refers to as "other monetization methods." These methods, taken as a whole, have topped retail sales. Digital sales are a rapidly growing force in the industry, but that alone does not yet trump retail sales. We apologize for any confusion.

During the second fiscal quarter of this year, sales of games (and accessories and hardware and all the associated gimmickry the industry puts out) hit $4.2 billion, a slight increase over the same time period last year. This is business as usual.

However, the NPD Group announcement that included that de rigueur bit of news also announced that for the first time in the history of the gaming biz, cash generated by digital game sales overtook the sales of physical, retail games. The former pulled down $1.74 billion, while the latter earned a still-quite-respectable $1.44 billion.

Presumably, you've all got a grasp on what "retail game sales" means. That includes games you pick up from a store, complete with clamshell packaging, nifty artwork and if you're lucky, some kind of gaudy trinket that will sit on your shelf for months collecting dust.

Digital sales, on the other hand, includes all the games purchased over Xbox Live, the iTunes App Store and via Facebook. For the most part, these titles are far less expensive than their retail counterparts, so that $1.77 billion figure consists of far, far more copies sold than retail's $1.44 billion.

As All Things D points out however, the NPD Group has only been tracking the sales of digital games for a relatively short time, so it is possible that this victory for digital sales is a momentary quirk. That said, I doubt you'll find many in the industry who can claim genuine surprise that this day is finally upon us. It's been predicted for years.

The real question we are now faced with is what exactly this means for the future of retail sales. Assuming the numbers indicate a genuine trend, it seems increasingly nonsensical for developers to devote time and energy to the relatively less lucrative enterprise of stocking GameStop's shelves with the latest triple-A games.

I'm not suggesting that this might signal a decline in the size and scope of games as a whole in favor of smaller, Angry Birds-esque distractions -- there will always be a thriving market for epics like the brilliant Dark Souls -- but perhaps the days of bedroom floors littered with endless game cases is quickly becoming a thing of the past.

When your kids inevitably ask you what a DVD was, you'll be able to turn up your nose in disgust, and mutter something about having to walk uphill in the snow (both ways!) to get your Gears of War fix.

Source: All Things D
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