Skip to main content

The gaming landscape is changing as digital sales are up while physical sales are down

XBL-dashboardThere were many trends that guided the video game industry across 2012: The rise of crowd-funding development through Kickstarter; the expansion of more developers into free-to-play gaming; and the death of the subscription-based MMORPG to name a few. The most noticeable trend in the industry, HOWEVER, created a pall that hung over it entirely.

As big studios closed en masse and retail tracking firms reported more and more dour data each quarter, it was clear that 2012 marked the end of the video game industry as primarily a business of physical goods. Cartridges, Blu-ray discs, and every other format began to make way to digital distribution. According to the NPD Group, the digital industry is growing steadily but nowhere near fast enough to replace revenues lost from physical sales.

Related Videos

The breakdown: In the United States, video game sales (not including hardware like consoles or accessories) totaled $14.8 billion. Of that total, $5.92 billion came from digitally distributed content, including games, DLC, in-app/game purchases and other content. That is a 16 percent jump over digital totals from 2011. Physical game sales, meanwhile, came to $8.88 billion total, a drop of 21-percent from the previous year. Part of that is due to the lack of software released last year. Physical sales are declining faster than digital sales are increasing, thus the 9-percent drop in total video game revenue in 2012.

It’s important to note that the NPD Group’s data isn’t exact, since many leading digital distribution platforms don’t publicly disclose their sales data. Valve, for example, doesn’t publicly state how much money Steam makes each year. Even the NPD Group’s retail data isn’t 100-percent accurate. It’s only in the last eighteen months that the NPD Group started including sales data from Walmart, one of the largest video game retailers in the country. Its data is accurate and reliable enough to recognize a trend that is fundamentally altering the gaming industry, though.

The question now is whether or not 2013 will see digital revenues increase at a faster rate? Growth in the digital market is steady, but not swift. Digital revenue grew just 14 percent between 2010 and 2011, compared to the 16 percent jump between 2011 and 2012. There are also a number of new gaming machines on the horizon that could reinvigorate the physical goods market. Sony’s PlayStation 4 (Orbis) and Microsoft’s Xbox 720 (Durango) could spur a recovery of the physical market. In 2012, there were 29-percent less games released across all platforms (barring mobile), so the coming of new consoles and launch games could prove to be a major boon for the industry. The technology would need to excite consumers in a new way though, as the Wii U’s abysmal game sales show that new hardware alone isn’t enough to get people spending.

Editors' Recommendations

The best free Nintendo Switch games
black friday 2019 nintendo switch deal lite hands on 3

The Nintendo Switch offers an unparalleled gaming experience, allowing you to enjoy games big and small, no matter whether you’re on the couch or on the go. That said, Switch games rarely receive a discount, even if you’re constantly checking for the best Nintendo Switch deals. Our list of the best free Nintendo Switch games is here to help.

We've rounded up the top free-to-play games on Nintendo Switch, from Switch Online exclusives like Tetris 99 and Pac-Man 99 to third-party hits like Fortnite and Rocket League. 

Read more
How to connect your Nintendo Switch to a TV

The Nintendo Switch has quickly become a household item. The system works as both a handheld device and a TV console, making it both versatile and convenient for players to use. Although using the Switch in its handheld form is awesome, the reality is that the graphics on a TV can enhance the experience of any Switch player. For those of us that struggle to put systems together, there is hope. Fortunately for us, the Switch is actually pretty easy to hook up to any TV, so long as it has an HDMI slot. Here's how.
Setting up the Nintendo Switch

For those who are new to the system, every purchase of the Nintendo Switch not only includes the Switch itself but also a Switch dock. This dock will be key in putting your system together for the TV. The first thing you're going to want to do is take out the dock and all the cords. Make sure that you have the dock, an HDMI cord, and a power cord for the system. If all three are present, you're good to start!

Read more
Dell’s latest sale drops the price of this gaming laptop to just $650
dell laptop flash sale deal february 2023 g 15

If you've been planning to buy a gaming laptop but you don't have much cash to spare, you'll want to check out Dell's latest sale. It includes a $200 discount on the Dell G15, which brings its price down to a more affordable $650 from its original price of $850. Like most gaming laptop deals, we're not expecting this one to last long, so if you want to take advantage of it, lock it in now or risk dissapointment.

Why you should buy the Dell G15 gaming laptop
A gaming laptop should be able to keep up with the increasing requirements of modern video games, according to our laptop buying guide. The Dell G15 is capable of doing so with its 12th-generation Intel Core i5 processor and Nvidia GeForce RTX 3050 graphics card. It's got 8GB of RAM that's acceptable for casual gaming, and which our guide on how much RAM do you need says is a starting point for laptops. However, to make the most out of this machine, it's highly recommended that you save up for an upgrade to 16GB of RAM as soon as you can.

Read more