The news that 80% of game sales in the UK are now made digitally caught my eye.
The figures come courtesy of the Entertainment Retailers Association. It said that of the £3.86bn revenue generated by the video game market in the UK in 2018, £3.09bn was from digital and £770m was from physical sales.
This includes microtransactions, DLC, subscription services, pay-to-play as well as individual game sales, and represents a 12.5 per cent year-on-year increase, while the physical revenue figure is down 2.8 per cent. Overall, the games industry is in good health; the total game sales revenue figure is up 9.1 per cent year on year.
Of course, the implications for retailers are potentially massive. I have already noticed that my local city-center GAME has diversified into selling second-hand phones. It wouldn’t surprise me if similar things are happening across the country. GAME are also trying to compensate by focusing on esports and other potential revenue streams.
Although these figures do not include hardware sales they do represent a clear long-term trend in the way people are consuming their games and as such they do pose a challenge to retailers in particular. If you look at say, the decline in print media relative to online media then these trends to reinforce themselves through the generations. Younger gamers will become used to buying their games digitally in the same way younger people in general no longer have the habit of picking up a newspaper and they will carry this through their lives and in many instances that habit will be passed on.
So, although bigger retailers maybe to survive through diversification at the current moment, this is unlikely to be a viable long term strategy. Esports is one potential avenue for retailers to go down as after-all they occupy a physical space and this is something they can offer that digital spaces cannot.
What happens in the long-term only time will tell but be prepared for some changes at your local game retailer…..