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.

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.

Smart Home

Clean up with these Presidents’ Day sales on washers and dryers

Clean up with these Presidents' Day weekend sales on washers and dryers. We picked the top washers and dryers from six major online merchants, but there are many more choices. Altogether the six sites have 920 washers and dryers on sale.

Here's our take on the best game-streaming services currently out there

You can still get your physical video game discs or cartridges at your local store or download games digitally, but another option is even more convenient: Game streaming. Here are the best game streaming services.

The best Presidents’ Day sales 2019: Amazon, Walmart, Dell, and more

Presidents' Day sales are a great chance to score electronics, clothing, home and office stuff, and other goodies at a discount. We’ve smoked out a large handful of the best of these Presidents' Day deals, from tech to bedding, to help…

Smartwatch sales soared in 2018, with Apple leading the charge

The NPD Group, a market research organization, has reported smartwatch sales soared in 2018. Apple is leading the charge, but it's clear there's still room in the market for competitors, as Samsung and Fitbit also did well.

Kingdom Hearts 3 on Nintendo Switch reportedly never going to happen

Kingdom Hearts 3 for the Nintendo Switch will likely not happen, according to Game Informer's senior editor, Imran Khan. Square Enix is reportedly considering an alternative in bringing the franchise to the console.

This list of PlayStation 4 exclusives puts its competitors to shame

The PlayStation 4's game library and incredible selection of exclusive games could make anyone with an Xbox One or Nintendo Switch think twice. Here's our list of the latest and greatest PS4 exclusives.

Apex Legends dataminers discover upcoming characters and weapons

Dataminers have discovered code in Apex Legends that refers to characters named Octane and Wattson, and weapons named the Havoc Rifle and the L-Star EMG. Octane is believed to have a Stim Pack ability, while Wattson has the Tesla Trap.

Bayonetta 3 still in the works, set to launch on Nintendo Switch this year

Bayonetta 3 was notably absent from the latest Nintendo Direct presentation, raising concerns that the game will be delayed. A Nintendo executive clarified that the Nintendo Switch exclusive remains on track for a 2019 release.

Over 16,000 Apex Legends cheaters have already been banned by Respawn

Respawn Entertainment revealed that it has already banned over 16,000 cheaters in Apex Legends in the less than two weeks since its release. The developer may be working on an in-game feature to report cheaters.

Get the most life out of your Xbox One controller with these tips

The Xbox One controller has fantastic battery life, but eventually your batteries will still die. To make it even better and ensure you never have to stop gaming, follow these tips.

How you can share your best gaming moments with friends on the PS4

Check out Digital Trends' quick guide to everything you need to know to save your outstanding PlayStation 4 gameplay moments, share them online, and transfer them to your computer.

A beginner’s guide to Far Cry New Dawn’s postapocalyptic Hope County

Far Cry New Dawn is yet another entry in Ubisoft's popular open world shooter franchise. But while it may feel quite similar in motion, the progression system is changed in a lot of ways. Our beginner's guide is here to help.

Learn to scavenge like a pro with our Far Cry New Dawn crafting guide

Far Cry New Dawn revolves around the hunt -- the hunt for materials to craft new weapons, vehicles, and other useful items. It's easy to miss out on great opportunities to find new materials if you don't go off the beaten path.

PS4 vs. Switch: After weighing the pros and cons, which one comes out on top?

Nintendo Switch versus PlayStation 4: Which one has better overall value? We break down the pros and cons of each platform to tell you which of these consoles is truly worth the money.