Retail Still Dominating Other Forms Of Game Software Distribution

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Despite the growing popularity of digital distribution services like Steam and TotalGaming.net, a new report indicates that retail outlets remain by far the dominant channel for global videogame sales.

Compiled by Games Investor Consulting, the report indicates that “full-game direct download” distribution accounts for only 0.4 percent of global videogame software revenues, while “downloadable console casual games” for all three major game consoles, which includes casual, retro and back-catalog games, added up to only 0.1 percent. Retail sales channels, meanwhile, accounted for 72 percent of the game software market worldwide.

Among other non-retail sales channels is mobile gaming, which despite what the report calls “structural problems” in numerous areas leads the way with ten percent of the market, followed by incremental downloadable content (currently seen primarily in Asian MMOGs) at 7.3 percent, MMOG subscription fees at 6.7 percent and casual PC games distributed through community sites, game portals and independent developers, which holds 3.2 percent of global sales.

“Retail is (and will remain for the foreseeable future) the dominant sales and distribution channel for games,” the report says. “The mechanisms behind retail – manufacturing, infrastructure, POS, inventory, sale or return agreements – are the foundations of the industry’s most common commercial models, whose rigidity is reflected in common commercial models but is also driving innovation in digital distribution.”

“Retail will retain its position at the head of the growing list of distribution channels for at least the next five years, and probably longer,” the report says, but also adds, “It faces a war of attrition with digital distribution, which will take a steadily growing proportion of the market.”

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