M&E Daily

Game Retail: Spending on Digital Platforms, Used Discs, and Rentals Pulls Ahead of New Release Biz

Consumer spending on mobile and social games — along with downloadable games and content, pre-owned physical titles, rentals, and game subscription services — outpaced sales of new console and PC titles by more than 20 percent during the second quarter, according to new data from the NPD Group.

Sales via digital and “other” physical monetization methods totaled $1.74 billion during the quarter, compared to $1.44 billion spent on new packaged games, NPD says. The spending levels represent a shift from the first quarter of 2011, when consumers spent eight percent more on new physical releases ($2 billion) than on digital content, used titles, and rentals ($1.85 billion). But the Q2 spending was enough to put the digital and “other” game businesses on top for the first half of the year ($3.59 billion to new physical game software’s $3.44 billion).

Clearly, this is not an apples-to-apples comparison. Since social and mobile games often don’t have console counterparts, the spending data may represent less of a format shift than an expansion of the overall games market. Nevertheless, with music and video, the rise of digital game markets coincides with a mature physical distribution platform, and a challenge at retail to engage shoppers with new packaged media products.

NPD also does not disclose how large a percentage of “other” game spending is claimed by used discs and rental services — which, as in the video market, represent either lost sales or new revenue opportunities, depending on your perspective.

The total amount spent by consumers on hardware, content and accessories is estimated at $4.5 billion for the second quarter of 2011, an increase of one percent versus Q2 2010, NPD says.