Is bundling killing software sales?

Christopher Dring
Is bundling killing software sales?

Boxed games are struggling to sell because consumers don't need to buy any, UK retailers have told MCV.

Fewer physical games were sold in 2014 compared with 2013, while recent releases – including Saints Row and Evolve – have not achieved the numbers some retailers had anticipated.

The figures are disappointing, particularly in the face of a rapidly rising install base for Xbox One and PS4. Combined, the two platforms have sold almost 3.5m units in the UK so far.

In the UK, for the first 14 months of the respective PS3, Xbox 360, PS4 and Xbox One launches, PlayStation tie ratios are down 14 per cent and Xbox down 16 per cent,” said games industry analyst Nick Parker. This reflects higher growth in hardware sales generation on generation than software sales.”

Leading UK retail experts have said that the success of hardware may actually be responsible for slower software sales. Most Xbox One and PS4 consoles sold have been bundled with games – including big brands such as Call of Duty, Assassin's Creed, FIFA and Destiny.

It's a complex issue," saidChart-Track director Dorian Bloch. "Most people have what they need right now, or are dabbling in second-hand.

The launch of Xbox One and PS4 saw both sold with a very high proportion of ‘bundled' software.”

Bloch also said that over 26 per cent of all PS4 and Xbox Ones sold in 2013 were bundled with games. However, Chart-Track does not factor in ‘soft-bundling', and so the firm estimates that up to 50 per cent of consoles were sold with games.

For most of 2014 the level of bundling reduced, but over Black Friday it increased - Bloch estimates that as much as 90 per cent of hardware sold came with software.

The weeks after Black Friday weren't great for hardware sell-through and many people receiving software with the hardware hasn't helped further purchasing,” Bloch said.

The Hut Group's Mike Fethers added: It is still the quiet time of year with consumers still recovering from overspending during Black Friday and Christmas.

Most will be playing the games they got free with consoles in Q4, some of the game bundles that were doing the rounds included 40 to 50 hours of game time.”

Yet Nick Parker says that although bundling may be impacting some games, it isn't responsible for the overall decline.

It could be down to the availability of blockbuster franchises in that launch period, and the increased availability of downloaded and indie titles.

There's also a shift in consumer behaviour to buying fewer boxed games as a whole. Eight years ago there was little else to compete with consoles. Gamers now concentrate on one or two console releases a year, and spend their remaining budget on digital console, PC and mobile games.”

Other retailers point to an increased gravitation towards triple-A products, with next-gen ‘upgrades' and more niche IP simply not cutting it with consumers.

Sell through on the new gen is solid, but consumers are lacking that must-have game. We desperately need a few less next-gen reboots and a few more must-have games like Destiny,” said Simply Games' purchasing director Steve Moore.

Meanwhile, one major retailer says that the quality of games is not matching what gamers are demanding.

Customer expectation on new gen is higher than the final games being delivered.”

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