Monday, January 19, 2009

PC Game Retail Sales Drop 14%, Revenue Shifts Online?

Retail PC game sales fell 14 percent in 2008, says research firm NPD Group, with revenue of $701 million down from $911 million in 2007 and $961 million in 2006. Where are all those absent hundreds of millions going?

Simple, say some. Online.

The rub? Market researchers like NPD only report retail PC game sales, leaving validation of online claims in a lurch. That may be about to change, but for now, we lack reliable independent indices for games purchased digitally, be they individually, iteratively, or as "services" like MMO subscriptions.

Confession: I haven't purchased a PC game from a retail store for years. Yes, the PC games I review ship to me straight from publishers, but I only ask for copies of what I review, and that adds up to a fraction of what ships annually.

I play dozens more besides, whether for my own edification (mostly wargames and simulators), or just to put a toe in the water.

And I purchase all of them online.

With respect to the folks stuck behind tube-lit cash-wraps, I despise sneaker shopping. I hate driving, peddling, or hoofing to malls and shopping centers thronged with people just as irritable as I am to be there, contributing to the systematized bedlam, wandering through rude, surly, elbowing crowds full of desultory consumers. I hate parking half a mile away in rain (or sleet, or snow) dodging other drivers haphazardly probing for rock-star stalls, stepping over pitted concrete rain puddles, tactically avoiding flocks of baby strollers and shoppers thrice-wide with shopping bags slung from arms like drooping wings. And the soundtrack: Hissing espresso machines, the whine of clean-sweepers, splashing dummy waterfalls, the grating whump-whump-whump of techno music, the toddlers on kid-leashes, howling like tea kettles.

And so on.

Most of all? I hate the way PC games have become store pariahs, crammed into the backsides of accessory stands, bookend-out, not a one front-facing.

It's a form of deflation: As prices drop in a recessing market, consumers refrain from buying in anticipation of even lower prices, sending the market tailspinning.

Likewise, as retail PC game sales slow and retailers quash marketing plans and scuttle store-stock, PC gamers view physical retailers as unreliable purchase points. The proverbial vicious circle.

The picture brightens slightly if we credit online sales. But all we have to date are claims. Gabe Newell, managing director for Valve Corporation (which owns Steam) says online sales are growing, but isn't sharing figures. Direct2Drive, a subsidiary of IGN Entertainment and one of the oldest digital distributors, has, as far as I can tell, never supplied online sales metrics. In short, analysts and journalists are navigating a sea full of sunshine in boats without rudders, compasses, or paddles.

So with sympathy to all the developers and publishers perturbed by reporters who like to crank about PC gaming: Show us the money. NPD's monthly sales approximations backed by retailer data are newsworthy. Exuberant claims about online game sales without supporting evidence, aren't.

via Matt Peckham @ PCWorld

Jason Kiwaluk

Mower & Shoveller,

Ideation | Ecommerce | Fintech | Innovation | Strategy | Opinionated Agitator RevenueWire,FuturePay+PayMotion

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