M+E Daily
At Game Supply: Digital Sales Grow, Physical Market Still Essential
Story Highlights
By Mel Lambert
“The key to success in the gaming space is to anticipate changes and respond to its continuing complexity,” stated John Quinn, VP of Global Account Management with Technicolor, during his opening address at the Game Supply conference in Burbank, Calif. Wednesday.
Quinn’s remarks jibed with the videogame market observations of analyst Michael Pachter, managing director at Wedbush Securities‘ Research Division. Pachter reported that in 2010, the North American market for packaged media was nearly $20 billion — up 21% from 2006, but down 14% from 2008 due to current economics. Digital product sales accounted for an estimated $6 billion in 2010.
“The market is moving towards multiple platforms,” Pachter said, “with multiple online players. For growth, the [industry] must remain platform-agnostic, and we should embrace downloadable content. But movement to the Cloud has been slow, because 20% of consumers still lack Internet access.”
Graham Gee, VP of Entertainment Measurement with the Nielsen Company, offered that the migration from bricks-and-mortar to online shopping will continue, with the latter increasing twofold in 2010. “The value/convenience outlets will continue to win market share, including Walmart and Target,” he said. “But the retail experience remains critical to building awareness of new games.” Nielsen’s Homescan service tracks purchasing of videogames from a large number of households.
During his conference keynote, Peter Moore, president of EA Sports, stated that “the market for physical goods is not diminishing, particularly for high-definition products.” However, Moore added, “By migrating from a transaction-based to a [digital] service-based model, we can keep the disc fresh and keep game players interested in the products.”
Moore said that the videogame industry’s worldwide digital product sales grew from $15.9 billion in 2009 to an estimated $19.9 billion in 2010.
Mel Lambert is principal of Content-Creators.com, a Los Angeles-based consulting service.
