EEDAR predicts DLC and DLG sales boom in 2011

Who was there: Electronic Entertainment Design and Research (EEDAR) president and chief executive officer Greg Short presented solo, discussing the current state of the global games market.

What they talked about: Though the presentation was primarily focused on the European and North American retail markets, Short did briefly touch on issues and trends present in Southeast Asia. The presentation began with a big picture overview of the industry as a whole, saying that worldwide game sales now exceed $50 billion annually.

The healthy figure hides the somewhat emaciated industry below the fur coat. Between October 2008 and December of 2009, 11,400 workers in the industry lost their jobs. The tightening of the fiscal belt associated with the global financial crisis saw publishers return strongly to licensed games and sequels, avoiding the risks associated with green-lighting finance for new intellectual properties.

Despite the long-held belief that games are the recession-proof industry, consumer software attachment rates also took a nosedive over the same period, dropping from an average of between six and eight titles per console owner, to a more modest two to three games purchased per year. There's always a silver lining, and in this case, despite software sales plummeting as consumers held onto their dollars, releasing fewer games had a noticeable impact on the quality of the games being released. Short showed a chart comparing median game quality, showing that the average game review score has improved since 2006.

The waves of unemployed developers left out in the cold by the tough financial climate appear to have landed on their feet, with many of the small studios founded by redundant devs now working on or in some cases reaping the rewards of the downloadable titles spurred on by the layoffs. Shifts to easy-to-develop-for platforms like Facebook, Xbox Live Arcade, iPhone, and the PlayStation Network have provided outlets for short-length projects.

The EEDAR boss touched briefly on hardware, singling out Microsoft and Sony's plays in the motion space but said that ultimately the success of the two products will be based around compelling content and which device receives the lion's share of the love from third-party software developers.

Downloadable content and downloadable games were recurring themes during the panel, with 2009 representing the biggest year on record for downloadable content sales. EEDAR expects a similar, but slightly smaller trend for 2010, but said that 2011 will be back in a big way as longer development cycle games come to market. Regardless of whether or not the content is paid for, EEDAR revealed that 28 percent of gamers don't ever check for the availability of DLC, while 22.5 percent actively seek it out before launch. Asking users to pay for extra weapons, vehicles, and maps pushes the uninterested slice of the pie higher, with 35.4 percent saying they never look, while 17.2 percent actively search out DLC before making a purchasing decision.

Speaking about some of the largest hurdles with digital delivery--broadband speeds and capped data--Short said with gusto that he expects to see Rockstar's as-yet-undated detective title L.A. Noire, a game that "fills an entire Blu-ray disc" hit shelves this year alongside BioWare's Star Wars: The Old Republic.

Cloud gaming streaming services like Gaikai and OnLive were briefly touched on, suggesting that if successful, they will represent a radical shift to the industry. But, like DLC adoption, hurdles including server placement and availability, technical bugbears, and restricted Internet speeds will all need to be conquered before the services can soar. Short finished his presentation espousing the value of retail, saying that at least until people no longer purchase game console hardware, retailers will play a pivotal role in connecting gamers to content to play.

Takeaway: Digital distribution of gaming content is here to stay. Despite murmurs that it will soon make brick-and-mortar retailers redundant by cutting out the middlemen, Short believes it’s unlikely to become the dominant delivery method for at least the next few years.