Developer says its distribution platform has instead encouraged more people into stores
Digital distribution of games doesn't hurt traditional retail outlet sales - that's the message Steam platform holder Valve Software told assembled media journalists at a briefing in its Seattle offices today.
The US independent developer, responsible for games like Half-Life and Portal, also runs the popular Steam digital distribution service, which in recent months has courted the affections of firms such as Rockstar, Eidos, Sega and Ubisoft, selling their titles through the platform.
But despite becoming a key source of back catalogue sales, the service hasn't dampened retail's prospects, the firm said.
"There's this idea that digital sales cannibalise retail," said Jason Holtman, Valve's VP of business development.
"Everywhere you turn, people have decided that it's a zero-sum game - that when digital distribution comes along, it's taking sales away. But that's not only not true, it's actually the reverse situation - having a connected platform on the PC is helping sales both online and in retail, because you can be smart and talk to your audience."
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Valve's assertion comes from data gleaned from a recent 'free weekend' for its game Day of Defeat, which allows players to sign up and play the game free for two days. At the end of the period, players are shown an advert with a link to buy the game directly through Steam. Conventional wisdom, says Holtman, would dictate that immediately after this retail sales would drop and digital sales would spike, given the immediacy of being able to buy the game there and then - but actually the opposite happened.
"What's most interesting is that there was a spike in both types of sales - a lot of the people who played and enjoyed the free weekend took us up on the digital offer, but a lot of other people added just as normal - they went to a retail store and bought the game. What's particularly striking about this data, though, is that not only is there no cannibalisation, but retail sales were actually 28 per cent higher than digital sales. Not only did retail not trough, it peaked even higher than digital."
The company did reveal, however, that it's seeing 191 per cent growth year on year in its online sales, while its packaged retail sales are seeing "sub 10 per cent growth rates", and that within the next three months it will cross over to seeing more of its business coming from the online channel.
Also announced were future update plans for Steam in order to ease the problems many users have with PC gaming, including automatic driver updates and automatic system requirements checking, going as far as to suggest how certain hardware upgrades would affect game performance.
Comments
interesting...
I think retail's slow abandonment of PC gamers in the UK has been sped the popularity of download to own up rather than vice versa.
What I find interesting is that MCV leads with the quote on downloads not canibalsing sales - what retail wants to hear. Whereas GI.biz highlights the quote on the revenue difference - what retail doesn't want to hear.
Re: interesting...
I think the digital distribution of pc games was innevitable. Its gotten to the point where trying to hunt down a pc game can be infuriating.
Considering that most games retailers have drastically reduced their PC sections from extensive back catalogues to the latest top 20 in favour of more floor space for 360/ps3/etc software there shouldn't be any real concern amongst retailers of it hurting them in anyway.
Re: interesting...
Thanks to situations like the recent GT5P fiasco, people are going to realise the "it'll make games cheaper" line was untrue. GT5P was £25 for the download version, whereas you could buy the disc version for either the same price or up to £8 cheaper.
It's a fact that if you can get people to buy your games for retail prices, without incurring the costs of shipping to retail, then you're not going to drop the price of the digital version. All people will do is buy it, then complain... instead of complaining and not buying it.
The games industry is becoming more and more greed driven and digital distribution is the ideal feeding ground for money hungry companies. You only have to look at DLC for that. Buy a game with 70 songs for £40 and then buy additional songs at around £1 each... but that's another story altogether.
Re: interesting...
True LeeC,
One also has to take into account the realies of actually downloading all this digital stuff as well. Try downloading episode 2, Command and conquer3, Shivering Isles on LIVE etc. Yeah brilliant, straight to my PC/Console, but even with these "high speed connections" which are nowadays shared between several family members in an average household these days, it means keeping your machine on overnight possibly for a number of days. Or, i can pop down the road and picku up a disc and maybe download one or two updates. Plus, and i know its an old arguement, you have something "physcial" to put on a shelf. We are materialistic beings after all, and we like our artifacts. As i have said before, im a huge fan of digital distribution (hate shopping, maybe thanks to working in retail 10yrs of my life lol - thank god im out), just i dont think the infrastructure is quite there to support it yet.
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MCV is the leading trade news and community site for all professionals working within the UK and international video games market. It reaches everyone from store manager to CEO, covering the entire industry. MCV is published by Intent Media, which specialises in entertainment, leisure and technology markets