Recently, published reports are starting to confirm what many in the gaming industry predicted would happen – sales of videogames are increasingly digital and not physical. In fact, as IGN reported today, just 34% of game sales are physical, in-store discs. This number comes from a study done by the Electronic Entertainment Design and Research (EEDAR) Group recently.
Perhaps more telling are the number of companies who are now choosing to release games on ONLY the digital format. EEDAR says that 146 companies – the highest number in history – released games exclusively in digital in 2014.
So, there is no doubt that physical game sales are shrinking, and they may eventually disappear altogether. The question then becomes, is this good or bad?
Well, the answer depends on who we are talking about. If you are a game publisher, the answer is probably that this shift is good. With the move away from physical discs, the problem of piracy is much less urgent. Yes, you can still pirate digital files, but it is much more difficult than simply ripping the information off of a disc, at home. Digital files can also be endlessly updated, changed, and added-to, on the fly, so there is much less of the pressure to release a complete, perfect product on Day 1 – with a disc release, there is obviously much more expectation on the part of the consumer that what they hold in their hands will be “the game,” and players get a bit annoyed if they are saddled with a massive Update after unwrapping their new disc.
If you are a console maker, you also like the move to Digital. Now, Sony, Microsoft and Nintendo can control the distribution of games on their devices, and maybe even take a bigger cut of the profits. In addition, and perhaps most intriguing, is the potential to Stream games online, which gives distributors a lot of control, and bigger potential profit.
Sony, for example, has already jumped on the Streaming bandwagon with its PlayStation Now service. The move to digital will only strengthen Sony’s position in trying to make PlayStation Now not just viable, but dominant – the “Netflix of Gaming,” the Holy Grail of Game Streaming.
The losers in the move to digital will likely be US – the gamers. Physical games gave us the ability to trade, re-sell and otherwise control the product once we paid for it. It has been common for gamers to play a game, then trade it back in to a store like GameStop and get a lot of the original purchase back. This will obviously end with the move to Digital – and that is bad news for gamers.
So, the bottom line is, the death of physical media has winners and losers. Corporations, especially distributors like Sony, Microsoft and Nintendo, will win big as the industry moves to Digital. They will see decreased costs, and bigger profits. The losers will be players – we will be at the mercy of the distributors and lose control of the product we paid for. Say goodbye to the heady days of buying, trading and re-selling your old discs – they are soon coming to an end.