The money the games industry makes from digital downloads is set to boom, according to Wedbush Morgan Securities analyst Michael Pachter.
Pachter, who’s no stranger to making bold statements about the games industry, says that today digitally downloads account for 2 per cent (around $400 million) of total industry sales.
Looking at the general trends, however, leads Pachter to believe that the revenue from downloads will increase exponentially over the next decade. He projects that the money generated from digital downloads will double to $800 million in 2010, and redouble to $1.6 billion by 2011.
"Downloads will become 20 percent of the market within five years,” he said in a Reuters report, “and probably peak at around 50 percent of the overall market in 10 years."
He made his prediction with the assumption that the whole games market will grow 5 to 10 per cent annually.
"As broadband penetration increases and the Internet connection migrates to the living room, downloads or cloud computing solutions will become much more viable," he said.