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NPD sizes up digital distribution market

Industry-tracking group finds 10 percent of paid content acquired for consoles is downloaded, 21 percent for non-consoles.

While the industry-tracking NPD Group keeps close tabs on US retail sales in the game industry, it has for years struggled with quantifying the growing realm of digital distribution. Concrete information about the sales of digitally distributed titles is still the closely held secret of vendors like Steam, Xbox Live Marketplace, PlayStation Store, and the Wii Shop Channel, but the NPD Group is trying to find another way to gauge the market's size.

The percentage of digitally distributed titles is likely to increase with companies investing in platforms like the download-only PSP Go.

The percentage of digitally distributed titles is likely to increase with companies investing in platforms like the download-only PSP Go.

Today the research firm revealed select figures from its quarterly survey of more than 8,000 gamers, including its determination that nine out of 10 "paid console video game acquisitions" for July-September 2009 were in a physical format. That includes purchases of full games (both new and used), add-on packs, expansions, and game rentals, be they from the local Blockbuster or from mail-order services like Gamefly.

An NPD representative told GameSpot that rentals accounted for 5 percent of all console content acquisitions and just 1 percent of non-console acquisitions (handhelds, PC, Mac, mobile, and smartphones). On those systems, the NPD Group found that physical formats accounted for 79 percent of all content acquisitions.

The survey also yielded a handful of other discoveries about the downloadable market. Those who buy games in a mix of physical and digital formats represent just 19 percent of the market in terms of headcount, but are responsible for 40 percent of the money spent on games, according to NPD figures.

The research firm also painted piracy as a relatively limited part of the industry when compared to music. Although the NPD Group's definition of piracy was inexact (it equated downloading files from peer-to-peer networks with piracy), the survey found some 4 percent of respondents to be involved in pirating games. Of the titles pirated, 72 percent were made for the PC and Mac.

30 Comments

  • imprezawrx500

    Posted Jan 15, 2010 7:43 pm GMT

    digital distribution is the future. why waste resources on disks and transporting them when you can just download them and often for cheaper than buying at the shop? unless games are really cheap at the store I don't buy pc games in physical form any more steam is just so much more convenient. for those who say hdd space is an issue you need to go and look up the price of hdds. $100 for 1tb is hardly an issue. maybe for x360 it is but not for ps3.

  • Carpe_Noctum

    Posted Jan 14, 2010 8:09 pm GMT

    I get some DLC for games I REALLY like and downloaded a couple of small games from PSN and LIVE, but really I would rather have a physical copy and would pay more to have it. Can't lend-out a movie on my HDD or borrow a game from someone elses.

  • Dante200X

    Posted Jan 14, 2010 2:03 pm GMT

    @ Inconnux: Oh...I haven't honestly never seen anybody use "Digital download" for digitally distributed games.

  • DKant

    Posted Jan 13, 2010 11:43 pm GMT

    "On those systems, the NPD Group found that physical formats accounted for 79 percent of all content acquisitions"

    Which I guess can only mean that PC+Mac game purchases are far greater than mobile and smartphone game purchases? (since obviously the latter group does not have a 'physical acquisition' option) The only way that might make sense is if we consider that far fewer people have smartphones or handheld gaming devices than PC's or Macs. But still, if you look at the numbers on iTunes alone (not so much for individual games, but overall it is a huge number) this conclusion drawn by the NPD does not seem to make sense.

  • enoslives7

    Posted Jan 13, 2010 10:18 am GMT

    I normally don't support pirating games, but this DLC is a load of crap. If companies are going to screw over the gamers by forcing DLC on us, then I hope pirating destroys their profits. Gamers come first!!!

  • theclaw135

    Posted Jan 13, 2010 8:46 am GMT

    Buying "new" games from retailers such as Best Buy or Walmart doesn't either. The games are already paid for wholesale by the time they reach shelves.

  • Sins-of-Mosin

    Posted Jan 13, 2010 8:27 am GMT

    They'll never get legit numbers because the sources don't want to give up how good/bad they are doing. And if they ask about P2P piracy than they better ask about used game piracy as it has the same effect. Aka no money for the dev/pub.

  • cspiffo

    Posted Jan 13, 2010 7:57 am GMT

    NPD can't account for privately held company sales figures from services such as steam. These numbers are highly skewed.

  • Inconnux

    Posted Jan 13, 2010 7:57 am GMT

    @Dante200X sorry what I meant by DD was Digital Download, the total sales of all the downloading services. And yes, I download all my PC games Via Steam

  • CharlieFubar

    Posted Jan 13, 2010 7:53 am GMT

    where is onlive anyway? anyone hears anything? Im guessing it was just a ponzi scheme to suck up those investor dollars.

  • yakkosmurf

    Posted Jan 13, 2010 7:30 am GMT

    I think each has it's place. I'd rather have big games on disc, so I can bring them to a friend's house and play them, and also to not suck up all my HDD space. But, smaller games are fine to download.

    The one exception is on a portable system. The UMD drive on the PSP shortens the battery life significantly. I plan to start downloading PSP games to my PS3, then transferring them. But again, PSP games are much smaller files, so this works well.

  • firehawk998

    Posted Jan 13, 2010 6:46 am GMT

    To me a physical ownership of game is much more preferable. Download works for DLCs such as Fallout 3 or Borderlans expansions because they are small files to download and also for downloable games like Shadow complex, etc. This report porves that unless Internet speeds dont get imporved full digital distribution method wont replace physical copies of a videogame. Based on this news things arent looking great for Onlive.

  • nate1222

    Posted Jan 13, 2010 6:30 am GMT

    While I prefer physical media (disc/cartridge), I can see digital distribution for older games with lower-tech. I've downloaded Old School goodies on my PC and I'm happy with it. Once I own a Wii, I plan to purchase more downloadables via Virtual Console than Wii games via retail. Alot of older games rock pretty hard. But there's no longer shelf space and the manufacturing costs wouldn't justify re-release on physical media.

  • 4quarters

    Posted Jan 13, 2010 6:11 am GMT

    I'd like to see digital full game rentals for PS3 and 360- Maybe for a week rental $5.99?

  • KBABZ

    Posted Jan 13, 2010 6:08 am GMT

    I personally will always be a disc man. There's something about the safe security of having a physical copy of something that feels much better than just an icon on your console menu. Granted, DLC is advantageous. I doubt Flower would have been distributed on Blu-Ray due to how small it is.

    Plus of course physical games with with the other two bonuses: a case and a manual, which you don't have with DLC. Plus of course if you buy something and think it wasn't worth it, you can always take it back to the store for a refund. I felt a bit jipped out when I got the PAIN Sports Centre thing, and dearly wanted to sell it back. But I couldn't. Tough luck for me, then.

  • Dante200X

    Posted Jan 13, 2010 2:47 am GMT

    @Inconnux "DD is the way that the majority buys PC games now... NPD is probably the most clueless organization posing as analysts."

    DD? You mean direct to drive? (commonly abbreviated as D2D, not DD). If that's what you meant, then no. Steam is still way ahead of them in a lot of ways. Their recent sales of hundreds of games proved that bit. In fact, somebody told me that D2D started their own sale around the same time to directly combat the one Steam had started. Steam still outsold them by leaps and bounds though.

  • flyingteddy

    Posted Jan 13, 2010 1:49 am GMT

    I would happily buy more games digitally if they were good value, but looking on PSN, PSP games can retail for up to 30 (GBP). It always seems to be cheaper to buy a physical copy and that just doesnt make sense.

  • Odeenay

    Posted Jan 12, 2010 10:55 pm GMT

    I'm surpised that they included used titles in their calculations. I don't belive that thay include uded titles when theyreport monthly figures simply becuase no one but the retailer sees any of that money.

  • lamprey263

    Posted Jan 12, 2010 10:30 pm GMT

    I myself buy quite a few downloadable titles, for the Xbox 360, PS3, and Wii, it's a very good way to have a blast with so few dollars. Though, that's for titles only available through download, if I could buy a physical copy I always will.

    I'd be especially interesting to get some actual figures about how PSNs downloads have been doing, since that's what the PSP Go specifically built around, but being they haven't been bragging about anything and just saying they're "satisfied", we have every reason to assume it's been a colossal failure.

    Anyhow, I've never been one to purchase games through Steam, but I have boughten a handful of retail games that register to my Stream account, and now that I'm registered as owning them I can redownload at any time, which is good if I ever switch computers or in the event that I should ever lose a disc. When it comes to online PC purchases, I'm quite a fan of GOG since they focus on older titles.

  • nintendo-wins

    Posted Jan 12, 2010 9:03 pm GMT

    If downloaded content was distributed by independent vendors instead of the likes of Steam, there would be more transparency on how many games were downloaded. I really do not see the danger of revealing sales figures of downloaded games.

  • invictuslemming

    Posted Jan 12, 2010 8:37 pm GMT

    I've bought a ton of indie games via steam. If I have the option to buy it retail though, I still like having the physical copy in my hand. The only exception to this rule is if its a popular new release and the stores are sold out, then I'll bend and get the digital version. I always check the local shops first though.

    Hmm, well there's a 2nd exception, steam pricing (especially boxing day) when it gets that low I could care less about the physical disc.

  • thekey

    Posted Jan 12, 2010 8:20 pm GMT

    @Marcusraitor

    Well it's just like I always say, people if you would rather have a physical copy STOP buying these downloadable games then it won't happen. But Of course it's not going to stop happening so...

  • Marcusraitor

    Posted Jan 12, 2010 8:01 pm GMT

    I dont like digital distribution, i only like digital distribution for rentals, but if i like a game i prefer physical copy, i dont care if its more expensive.

  • Inconnux

    Posted Jan 12, 2010 7:35 pm GMT

    DD is the way that the majority buys PC games now... NPD is probably the most clueless organization posing as analysts.

  • Deiuos

    Posted Jan 12, 2010 7:22 pm GMT

    It's cool to have these numbers in the first place. Now we can see the change as the years go on -- digital distribution will be on the rise, no doubt.

  • Kravyn81

    Posted Jan 12, 2010 7:09 pm GMT

    All this secrecy! It's like trying to figure out which nation has the most nuclear warheads

  • Cruse34

    Posted Jan 12, 2010 6:40 pm GMT

    @raahsnavj
    DD is the way of the future no matter what pirates have forced that on the rest of us. I for one feel less inclined to download a game than go buy the actual disc

  • Cruse34

    Posted Jan 12, 2010 6:38 pm GMT

    That didn't really say anything

  • mudman91878

    Posted Jan 12, 2010 5:17 pm GMT

    This 'survey' is worthless as it's console related. Everybody knows digital distribution hasn't taken hold of the console market. We didn't need NPD to tell us that which is basically all these results are saying.

  • raahsnavj

    Posted Jan 12, 2010 4:14 pm GMT

    I think all they have to do is paint as good a picture as they can... the response will dictate how close to the mark they are. If every digital distributor stays quiet you know you have over estimated. If you over rank one of them in comparison to a competitor you will see the victim lash out and give rebuttal numbers. If everyone cries it was under-stated the NPD can then ask for the real numbers.

    Little by little the egg has to crack and we get to see if DD is actually the wave of the future, a nice middle ground, or the hoax that everyone believes is saving the drop in retail sales.

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