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How Long Before Apps Overtake Physical Video Game Content Sales?

Soulskill posted more than 3 years ago | from the think-we're-just-waiting-on-call-of-duty-halo-and-wow-ports dept.

Businesses 144

jamie writes "Horace Dediu crunches some numbers and comes to a startling conclusion: 'If you look at the red line above and its slope, it would indicate that, given time, the App store will overtake the entire physical media gaming industry. The time when that happens will depend a lot on the growth or decline of the physical game media business, but another four years seems a safe bet.' This follows on the heels of some earlier analysis of apps per iOS device and what that steady upward growth means."

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Oblig (4, Funny)

somersault (912633) | more than 3 years ago | (#34914100)

Yuh-huh [xkcd.com]

Re:Oblig (5, Informative)

somersault (912633) | more than 3 years ago | (#34914116)

WTF. I just RTFA and it's comparing music sales to apps, not game sales. And these apps are not all just games either, so it seems a pointless comparison to make even if you can get it right. I probably wouldn't pay for a game on my phone, but I would perhaps pay for something like a navigation app if I didn't already have a good one built in.

And what's more stupid (5, Insightful)

Sycraft-fu (314770) | more than 3 years ago | (#34914314)

Is if you want to actually analyze game sales, the question isn't iPad shit, it is on computers. The reason is on PCs you now have a choice between retail/mail order and download for almost all games. Services like Impulse, Steam, and Direct2Drive sell pretty much every title online. Their regular prices are usually competitive with stores, and their sale prices are almost always better. So is a person wishes to, they can buy games online. It is a direct 1:1 comparison since we are talking the same games, the same platform.

THAT would be the thing to research. This just sounds like yet another tech journalist (using both terms loosely) who is infatuated with his iToys and thus wants to write an article about how they are T3H FUTURE OF EVERYTHING!!!11. Real research would have been to talk to game publishers and find out how their sales of physical vs download compare, and how that has been changing.

There's little data on it publicly, but Stardock, who runs Impulse and has published Sins of a Solar Empire, Elemental and Galactic Civilizations, says it is about 4:1 physical to online sales.

It is clear that the online market is large and growing. I personally buy nearly all my games on Impulse and Steam these days just out of convenience. However what I do has no bearing on what society does at large. Without hard data, it is foolish to say everything is going that way fast. It probably is in the long run, but who knows how long?

For that matter until game consoles start selling their games that way there is going to be a large physical games market there. Currently only some things, mostly smaller more indy type titles or older games, are sold for download on consoles. All the current titles are disc only. Given that consoles are a big segment of the gaming market (as are handhelds, which are also physical sales) until that changes you aren't going to see a move to "no physical media).

I think we'll see the day when physical media is more or less totally dead, but I could see it being 30-40 years before it happens.

Re:And what's more stupid (0)

Anonymous Coward | more than 3 years ago | (#34914586)

Of course you have to factor in that games consoles are the main seller of games which are still very much physical, PSP Go tried to go on-line games only and look where that went. Traditional game stores refused to sell them (not that there was really much demand).
I'm sure that if Microsoft, Sony or Nintendo brought out an on-line game store only traditional game stores would again possibly refuse to sell it.

Re:And what's more stupid (0)

Anonymous Coward | more than 3 years ago | (#34914610)

there's also a basic mistake using NPD data which is regional data

Re:And what's more stupid (1)

Monchanger (637670) | more than 3 years ago | (#34914932)

Very informative- thanks for that.

And beside online purchases there is also the emergence of games which are not purchased (Flash games), use micro-transactions (Facebook, LOTRO) and subscription based games (WoW) which derive their main revenue post-box sale. Ignoring these and why they are very popular while speculating on trends is short-sighted.

Something I find so strange is retail sales of game cards, which are not only far less cost-effective than online sales, but are also generally purchased by/for kids for whom that's not technically challenging.

Re:And what's more stupid (1)

Sechr Nibw (1278786) | more than 3 years ago | (#34915558)

The advantages of a game (time) card:
You don't need a credit card to keep a subscription active, once the time on the card is up, it's up, no accidental fees.
You can give it as a gift to someone else.
Typically they are priced at the one-month-at-a-time MMO price ($15/mo for WoW, $30 for 2 months on a game card). If the store has a sale, you can get it cheaper than the six-month-at-a-time price ($13/mo @ 6 months). I recall seeing sales that let you pick up two 60 day WoW cards for about $40-$45, which would put it at about $10-$11 a month.

Re:And what's more stupid (1)

mjwx (966435) | more than 3 years ago | (#34914962)

Is if you want to actually analyze game sales, the question isn't iPad shit, it is on computers.

Agree about the Ipad. Yes copies of flash games are passable but the proper games (or attempts at proper games) like FPS's are utter shite. Android will be the same. You will probably be able to get away with a fighter like Mortal Kombat or an easy driving sim/racing game like Mario kart but then you hit a hard limit of what you can not do with touch controls and no tactile feedback.

The reason is on PCs you now have a choice between retail/mail order and download for almost all games.

Yep, in OZ, local retailers are crying to the govt at every opportunity because I can order the same game from somewhere like Play-Asia.com for half the price delivered to my door. EB games wants A$90-100 per new PC release, Play Asia has it for US$40-50 + shipping. A boxed copy even beats Steams A$70 (but in Steam's defence, that price point is pushed by the publishers, not Steam).

There's little data on it publicly, but Stardock, who runs Impulse and has published Sins of a Solar Empire, Elemental and Galactic Civilizations, says it is about 4:1 physical to online sales.

I read the same thing, that was when Sins of a Solar Empire was released I wouldn't be surprised if it was 3:1 by now. Also remember that mail order copies still count as a boxed copy (the same as from a retail store). Where digital distribution is really making it's mark are in older games. If I've got $5 and time to kill, I'll check the latest specials on Steam, Impulse or GOG and I never keep that $5 these days.

Also "Last Years Gamers" are loving it, these are the people who wait a while before buying new games so they can stay behind the bleeding edge on computer hardware. They get six month old games for A$20-40

Re:And what's more stupid (1)

Lumpy (12016) | more than 3 years ago | (#34915038)

Call me when the profit from ipad game sales even TOUCH the profits from the call of duty series.

And how you cant play call of duty on the ipad without sucking hard. the Ipad and iphone interface is utter crap for FPS games.

Re:And what's more stupid (1)

Sycraft-fu (314770) | more than 3 years ago | (#34916010)

The publishers love the "last year's gamers" thing too. They can hit a market of people that won't pay full price, but are still willing to drop money. This was harder to do in retail since shelf space is expensive. Thus stores only carry titles that are performing. Generally once a title drops under $40 they axe it, except for some special budget titles. Digital stores allow for them to reach those customers. Titles can be kept forever, down to any price point.

It also takes cash away from the used game market to them. This is in part because you can't redistribute downloaded games but more because it is just easier and often just as cheap to get the older stuff online. So if you are shopping for those older titles you talk about, well your choices are used or online often, and if teh online version is just as cheap, then there you go. Buyer is happy, publisher is happy, everyone but Gamestop is happy.

Re:And what's more stupid (0)

Anonymous Coward | more than 3 years ago | (#34915164)

I'll use an ipad for gaming as soon as they turn angry birds into a 3d FPS.

Re:Oblig (2)

JWSmythe (446288) | more than 3 years ago | (#34914404)

    You're right. All they're showing is trending towards people buying more apps through iTunes than music. I didn't read the whole thing (I lost interest shortly after the graph), but it doesn't seem to include factors such as changes in the market. Has there been a trend of increasing numbers of applications, or making previously expensive applications cheaper? Maybe it's a trend that there are more iTunes devices out there. Or possibly that while the customer base continues to grow, the customers have all the music that they're looking for, and start purchasing more apps. In the last case, the red line would indicate longer term customers, and the blue line newer customers. I'm sure the question that Apple is asking is, what is the next line going to be? Despite what people tend to believe, those growth lines cannot always go up. Eventually they'll taper off. I had the same argument years ago with several people discussing the housing market. "It'll keep growing" they said, and I asked the simple question "what's supporting it?" As they learned more recently, absolutely nothing, and poof, their houses dropped in value.

Re:Oblig (1)

dwightk (415372) | more than 3 years ago | (#34914890)

maybe read the whole thing before speculating?

Re:Oblig (0)

Anonymous Coward | more than 3 years ago | (#34914904)

How do you write such a detailed response if you didn't get past the first paragraph? The comparison to the games market is later in the article.

And @somersault, did you really RTFA?

Re:Oblig (1)

somersault (912633) | more than 3 years ago | (#34916040)

Nah, I looked at the graph and went into a apoplectic statistics fuelled rage at how dumb the caption was.

I did read more of it after I got some replies, and I still think it's dumb [slashdot.org] .

Come on... Steve is feeling bad these days. (1)

denzacar (181829) | more than 3 years ago | (#34914408)

Cut them some slack.
Apple needs to boost its shares value somehow.

Prepare to read how iPhones clean the air, reduce global warming and feed the hungry in next couple of days.

Re:Come on... Steve is feeling bad these days. (0)

Dunbal (464142) | more than 3 years ago | (#34914798)

Apple needs to boost its shares value somehow.

      LOL. I'd like to see the faces of people who bought Apple stock recently "because it's bigger than Microsoft and has the second biggest market cap!". In the pre-market it's already down almost 5%.

      Where is your God now, Apple fans? Oh yeah right, in the hospital...

Re:Come on... Steve is feeling bad these days. (0)

Anonymous Coward | more than 3 years ago | (#34914820)

This just in..... iPhones help you increase the size of your p**** :)

Re:Come on... Steve is feeling bad these days. (1)

geminidomino (614729) | more than 3 years ago | (#34915108)

But apparently they don't help you use wildcards correctly. :)

Re:Oblig (2)

commodore64_love (1445365) | more than 3 years ago | (#34914532)

Yes I think online app games will eventually overtake physical DVD/bluray sales.
I also think it sucks.
You can't trade-in your used app for cash. You do save ~$3 for gasoline or postage, but that doesn't make-up for the overall loss of not being able to sell your game for ~$20 on the ebay.

Re:Oblig (1)

dwightk (415372) | more than 3 years ago | (#34914858)

clicking on the link and looking at the picture is not ReadingTFA

Re:Oblig (1)

somersault (912633) | more than 3 years ago | (#34915034)

Okay, I had a further look, and the figures are still all over the place and comparing apples to oranges. Physical video game sales are obviously going to dwindle into nothingness. For another thing if you're not just counting game apps, you should be comparing app sales to the whole of the software industry, and there's no way in hell that mobile apps are going to overtake that. We pay over £20,000 a year just for a two processor license for one application, then another £12,000 or so for 5 floating 3D CAD licenses. Until phones can be used for serious design work, mobile app sales are never going to overtake PC app sales. And while the mobile gaming industry is a profitable segment with room for growth, the Wii showed that there is still room for growth in the traditional home console market too. Likewise Zynga is making a killing on PC gaming with their Facebook shovelware (though technically you can probably play these games on mobile devices since Android 2.2 - I haven't tried any flash games on my droid).

Comparing iPhone/Droid games sales to physical and digital downloads would be a much more interesting article. Which is not saying very much.

Re:Oblig (1)

dwightk (415372) | more than 3 years ago | (#34915670)

Now that's worth a 3 or 4 interesting much more than the original was a 5 informative

Re:Oblig (1)

Enderandrew (866215) | more than 3 years ago | (#34915892)

You apparently didn't actually RTFA. You looked at the pretty picture and moved along. That chart shows music sales in iTunes, and App sales in iTunes. But the article said that physical game sales currently sit at $840 million a month, but are trending down 5%, where as app sales are steadily trending way up.

The suggestion was that as iTunes came to dominate all music sales, surely it will do the same for games.

The problem I have with the article is that I want to see overall game sales over a lengthy period. Is the 5% decrease this month, this year, or over 5 years?

Even then, I've got a couple problems with the article's assumption. They're directly comparing all app purchases (most of which are games, but not all of are) to physical media games. I think a better comparison might be iTunes GAMES REVENUE compared to that of console and PC games on the whole. Throw in Steam sales, PSN titles, X-Box Live titles, Wiiware, and physical media.

Now, how do those numbers look?

I think you might see that iOS games put a small dent into a gamers budget, but that didn't stop them from buying Left For Dead 2.

Re:Oblig (4, Funny)

buro9 (633210) | more than 3 years ago | (#34914246)

You know the moon is moving away from Earth at a verifiable few centimetres a year? Well if you extrapolate backwards it's obvious that the dinosaurs are extinct because the moon hit them on the head... doosh! That'd make you extinct pretty fast.

Cold hard science here guys... it's undeniable.

Re:Oblig (1)

yamfry (1533879) | more than 3 years ago | (#34914494)

"Did you know that disco record sales were up 400% for the year ending 1976? If these trends continues... AAY!"

Re:Oblig (1)

commodore64_love (1445365) | more than 3 years ago | (#34914666)

AAY? Are you the Fonz? ;-)

Re:Oblig Additional (1)

Scott Kevill (1080991) | more than 3 years ago | (#34914530)

Re:Oblig Additional (1)

commodore64_love (1445365) | more than 3 years ago | (#34914592)

That cartoon reminds me of an ad I saw on TV.
  - It was for ATT mobile devices to watch movies/hear music while on the go, and showed a family sitting in a living room, watching their Pads or phones, and nobody was talking to anyone else. Yeah that's an exciting future. Sign me up!

Oblig Simpsons (0)

Anonymous Coward | more than 3 years ago | (#34915604)

Disco Stu: "Did you know that disco record sales were up 400% for the year ending 1976? If these trends continue....Aaay!"

Good ridance (1)

igreaterthanu (1942456) | more than 3 years ago | (#34914102)

I've had to purchase old games that I wanted to keep playing again just because the disc got scratched. That isn't going to happen with something like Steam.

The App Store model is wonderful. Apple (with it's various restrictions) just has a poor implementation of it.

Re:Good ridance (1)

Anonymous Coward | more than 3 years ago | (#34914270)

Just because you suck at protecting your property doesn't mean the rest of us want to give up ownership. Being able to use product without having to re-get permission from the publisher every time is something I don't want to give up. Without it, a $50 product is worth about 50 cents or one go at an arcade machine....in 1993.

Re:Good ridance (1)

naz404 (1282810) | more than 3 years ago | (#34914342)

In that case you should try Good Old Games -> download all the games you bought DRM-free, back up the installer files, re-install anytime you want, re-download anytime you want.

http://gog.com [gog.com]

No need for an internet connection and authentication once you've downloaded the installer files, unlike Steam.

Re:Good ridance (1)

MikeDirnt69 (1105185) | more than 3 years ago | (#34914756)

Steam work offline too.

Re:Good ridance (1)

jakobX (132504) | more than 3 years ago | (#34914802)

It works but its a bit random. The problem with steam is that someone else controls access to things you bought. GOG on the other hand cannot prevent you playing what you bought. Even without DRM its still only a digital download and when it comes to price it cant really compete with torrents. It might be cause im getting a bit old, but im having trouble paying for data only. I need a physical object as well. Now get off my lawn you young whippersnapper.

Re:Good ridance (4, Informative)

vux984 (928602) | more than 3 years ago | (#34914272)

That isn't going to happen with something like Steam.

Steam has its own set of problems. It needs to fix the issues it has with "families", and how they want to use games. I want to buy a game and let my 7 year old play it without giving him my steam account. When he eventually moves out, he should be able to take it with him. When I pass on... does it just go poof?

Suddenly, simply having to take good care of your CDs doesn't seen all that awful. They can be passed around to who you want, when you want, and they don't disappear on you.

Of course, defective games infested with disc-checks and nasty DRM and anti-copying technology have eroded away so much of the convenience of physical media that people like you actually prefer to be locked into steams model.

I was in the mood to play privateer yesterday... so I dug up the CD, imaged it, and put it away, and fired it up minutes later (in dosbox). Took all of 5 minutes. That's how it -should- be, even with new games.

Re:Good ridance (1)

imakemusic (1164993) | more than 3 years ago | (#34914576)

Suddenly, simply having to take good care of your CDs doesn't seen all that awful. They can be passed around to who you want, when you want, and they don't disappear on you.

Funny, I'm not keen on passing my discs around as that's one reasons that they tend to disappear.

defective games infested with disc-checks and nasty DRM and anti-copying technology have eroded away so much of the convenience of physical media

Whilst I do like Steam it should be mentioned that there are some games on it that have their own DRM included on top of what Steam provides (e.g. GTAIV which involves using Steam, Rockstar Social, Microsoft Live and SecuROM). However, I don't see that as a criticism of Steam, I see it as foolishness on the part of the developers not taking advantage of what Steam offers...but maybe that's just me.

I was in the mood to play privateer yesterday... so I dug up the CD, imaged it, and put it away, and fired it up minutes later (in dosbox). Took all of 5 minutes. That's how it -should- be, even with new games.

I wanted to play Half Life 1 the other day... so I fired up Steam, downloaded it and fired it up minutes later. Took all of 5 minutes. That's how it is with games, even new games (provided your connection is fast enough).

Anyway, I don't see it as being "locked into Steams model". Both the Steam and physical media methods have pros and cons. I am still perfectly able to buy a game on CD and play that without touching Steam if I see fit, so it's not like I'm stuck with them. Sure, the games that I've bought through them are stuck on Steam but I knew that when I signed up for it, so who cares?

Re:Good ridance (0)

Anonymous Coward | more than 3 years ago | (#34916242)

I was in the mood to play privateer yesterday... so I dug up the CD, imaged it, and put it away, and fired it up minutes later (in dosbox). Took all of 5 minutes. That's how it -should- be, even with new games.

I wanted to play Half Life 1 the other day... so I fired up Steam, downloaded it and fired it up minutes later. Took all of 5 minutes. That's how it is with games, even new games (provided your connection is fast enough).

Whoosh. (Literally.)

His point wasn't that it took five minutes. It was that the CD was all that was required. Do you really think Steam is going to be there, in its present form, in 10 years? 20? 50?

Of course it will be, just like DIVX, the phones-home-and-plays-once disc format, not the codec. Just like multiple variations on DRM-encumbered services, all of which happened to be named Napster. Just like Real's audio store, and Microsoft's "PlaysForSure".

To play Privateer, all he had to do is put a plastic disc into a drive and run the code. (Or to transfer the .iso from CD to HDD to SSD to holographic memory device and load it into the emulator). He needed merely some bytes that were once on a disc he purchased. He needed permission from no one and nothing. The company that created that game could have long since crumbled to dust, and yet he could still play it.

To play HL1, you had to have actual connectivity to an external server - a server you do not own, whose contents you do not control, and whose policies you do not administer - and that server had to give you the code. No server? No game. Server doesn't like you? No game. Server doesn't like your game anymore? No game.

GOG does it right. Steam doesn't. A game should be like a book. If you own a book, you can read it, even if the publisher doesn't want you to read it anymore.

Re:Good ridance (1)

icebraining (1313345) | more than 3 years ago | (#34914830)

As someone else said here on /., the real solution is creating one account per game on Steam.

Good if you don't have any friends (0)

Anonymous Coward | more than 3 years ago | (#34915974)

Sure, then it would be a good solution.
But for those of us that want to keep up with friends through steam, asking them to add X amount of accounts to their friend list is unreasonable.

Re:Good ridance (1)

stewbacca (1033764) | more than 3 years ago | (#34915904)

DRM has nothing to do with the horrible physical media that is the CD/DVD. The disk itself will last a lifetime...its just those pesky scratches that make it unreadable that suck.

Re:Good ridance (2)

commodore64_love (1445365) | more than 3 years ago | (#34914568)

>>>because the disc got scratched.

I consider people who scratch discs to be lazy/careless. Ever since I bought my first CD player in 1989, I've never scratched a single disc. Not one. (And even the ones I bought used, they still worked despite the scratches.) Sure accidents happen - drop the disc; it breaks or gets scrathed; but if it happens to you habitually then I suspect You are the problem.

And you say "Steam" is the answer. Yeah steam and other online sites are great - until they go out of business and your ~$5,000 game collection stops working. I'll stick with the physical discs that I OWN forever, rather than just borrow. Ya know those Atari games I bought in the 70s? They still work. The Atari online game service? Not so much (it went bankrupt).

Re:Good ridance (1)

bytesex (112972) | more than 3 years ago | (#34915606)

My wife and kids and the CD player in the car are the problem. I love them over CDs though.

Re:Good ridance (1)

stewbacca (1033764) | more than 3 years ago | (#34915926)

I consider people who scratch discs to be lazy/careless.

I consider people who think such a horrible physical media was ever a good idea to be lazy/careless.

I may be lazy or careless, but I sure as hell don't have such low standards as people who actually claim they have NEVER scratched a cd.

Re:Good ridance (1)

stewbacca (1033764) | more than 3 years ago | (#34915950)

then I suspect You are the problem

Let me guess...you're a programmer?

Re:Good ridance (0)

Anonymous Coward | more than 3 years ago | (#34914590)

I've had to purchase old games that I wanted to keep playing again just because the disc got scratched. That isn't going to happen with something like Steam.

The App Store model is wonderful. Apple (with it's various restrictions) just has a poor implementation of it.

Too bad the article is actually talking about mobile apps vs. music and isn't even referring to games specifically.

And it's also talking about revenue generation only, it's not talking about quantity, quality, popularity, etc.

In other words, it's a big steaming pile of shit.

The answer - not for decades (4, Insightful)

tomhudson (43916) | more than 3 years ago | (#34914110)

The facts from their own chart: 10 billion in physical game sales vs 200 million in app sales. Even if it increases by 200 million a year, it will take a long time to catch up.

Also, last years decline in physical sales was due to the Great Recession, and has already been reversed.

Re:The answer - not for decades (2)

igreaterthanu (1942456) | more than 3 years ago | (#34914134)

Think more exponential.

Steam recently was selling BioShock for US$5. The local store here was selling it for approximately US$50. How many people are going to keep paying these ridiculous prices at a physical store? Not me.

Re:The answer - not for decades (1)

mvar (1386987) | more than 3 years ago | (#34914170)

The only way for the physical stores to keep up to the competition of Steam and the likes of it, is with "special"/"collector's" editions of those games...Which, now that i think of it, you can buy from amazon for the same price including shipping...well, never mind, they're doomed.

Re:The answer - not for decades (1)

hairyfeet (841228) | more than 3 years ago | (#34914464)

Or they can sell games at "impulse buy" prices to get folks through the door and then hope they can also sell them something more expensive, like I've seen my local Gamestop do a time or two. That is one of the things I like about Good Old Games, pretty much everything on the site is at impulse buy purchases, but hell wandering around retail you never know what you'll find.

Just this weekend I popped into Fred's with my GF to pick up some compressed air I perused through their disc stack while she was looking at housewares and found Mercenaries II for $6. Since I had seen Yahtzee's review [escapistmagazine.com] which stated while braindead it was still mindless fun I figured what the hell. I gave it to my nephew who is having quite a blast hijacking tanks and blowing up buildings.

So while I have no doubt eventually online will beat retail for PC (especially thanks to all the stores only carrying console games for the most part) as long as there are cheap games to be had folks will still shop at B&M. With consoles I don't see retail going away until the game companies finish fucking everyone with first use killing keys tied to consoles, which frankly will be suicidally dumb. Most folks I know with consoles trade the games they are bored with for discounts on new titles and thus buy more new games, but frankly it wouldn't be the first time greed destroyed a market.

Re:The answer - not for decades (0)

Anonymous Coward | more than 3 years ago | (#34914200)

Well my local store sold the game for 3€ last year. And games are usually quite expensive here in Finland. This is an exception, however. I guess they just took too large a print.

Re:The answer - not for decades (1)

Mascot (120795) | more than 3 years ago | (#34914256)

I assume due to the publishing deals, games are generally more expensive on Steam than in stores where I live. With the exception of the Steam sales, of course.

Result is that if I want a new game, I buy in a store and save 30-40% off the Steam price in many cases. The remainder of my games I buy when Steam does their 50-70% sales.

Re:The answer - not for decades (1)

Xugumad (39311) | more than 3 years ago | (#34914276)

Amazon.co.uk has it for £6.89, or about $10 (although for some reason I can't paste the URL, so you'll have to trust me). On top of which, I don't have to tie up my Internet connection for several hours downloading it, and the Steam sale was a limited time special. If I want to buy a game at launch, I can expect to pay £5-10 more for the digital copy (really, we don't know what's with that), compared to having a physical copy shipped to me in time for release day.

The point being that digital sales aren't always clearly better.

Re:The answer - not for decades (0)

Anonymous Coward | more than 3 years ago | (#34914616)

Counterpoint - I bought Fallout: New Vegas on release day from Amazon. It came to £23 and some pence, if I remember rightly (it was certainly under the £24.99 I was expecting). Amazon currently sell F:NV for £12.98.

Steam is still selling F:NV on PC for £29.99, "reduced" from the £34.99 RRP that no-one with an ounce of sense would pay.

Don't get me wrong - I have a Steam account for Orange Box, and F:NV (and as such will have one for any other game that uses Steam for copy protection), but due to their high prices I can't see myself ever buying anything from them.

I tend to check out Steam before making a purchase, but unless you get very lucky with their promotions the prices aren't that competitive.

Now GOG.com, on the other hand, I've bought a fair few games from.

Sooner than you think (2, Insightful)

Anonymous Coward | more than 3 years ago | (#34914154)

Buy a physical copy of an iPhone game. Go ahead. Go to your local game store and buy an iPhone game.

Oh, wait, you can't, because you can only buy them through the Apple App Store. (App Store cards don't count, you still have to download the game and don't get a copy on physical media.)

Guess what? Sony wants in on that action for the PSP2.

The answer is going to be "when the people selling games stop offering them any other way."

We've still got a few console generations to go, the Nintendo 3DS still uses physical media but allows downloaded games too. I'm incredibly unclear on how the PSP2 is supposed to work, I think the failure of the PSPgo (download only) means it'll still support physical media, but make no mistake: the era of getting games on physical media is coming to an end. Honestly, by the end of the decade, I expect all games will be download-only.

Re:Sooner than you think (1)

Fallus Shempus (793462) | more than 3 years ago | (#34914388)

'cept Ids Rage is is going to be 2-3 dual layer DVDs big, so I think I'll by a physical copy thanks.

I also still replay a lot of old games and my kids are catching up on my back catalogue, I want a game for life, not for the life of the company authorising my use.

Re:Sooner than you think (1)

minasoko (710100) | more than 3 years ago | (#34916116)

I want a game for life, not for the life of the company authorising my use.

This will be made a moot point by the forced obsolescence practiced since forever by the industry. They want, and have always wanted to exact precise control over the entire channel end-to-end.

It's a wet dream for these businesses to be able to almost completely guarantee that no consumer can buy or sell games second-hand. It's only because they had no other viable method of distribution that you've been permitted to take home a physical product up till now.
Those in charge of these businesses absolutely want you to only be able to play old games by their gracious say-so and through their marvellous Virtual Portal®. At a price, of course and only as long as they deem it profitable. It's software as a service and it's horrid.

Even PCs are not immune from this. It is not easy to play DirectX games from the 90s on current platforms and it's not going to get any easier with all the dialing home and DRM employed in modern games.
They are closing a loop-hole and they can't wait.

Re:Sooner than you think (1)

icebraining (1313345) | more than 3 years ago | (#34914870)

Download only is not the worst it can happen - at least it can be cracked. The worst is streaming only (a la OnLive).

Re:Sooner than you think (1)

Narishma (822073) | more than 3 years ago | (#34915958)

The PSP2 will still have physical media, unless they want it to tank in the territory where it will probably be the most successful (Japan).

Re:The answer - not for decades (2)

pushing-robot (1037830) | more than 3 years ago | (#34914206)

No, 10.1 billion per year in game sales versus 200 million per month in app sales. Also, TFA says that app sales may have already reached 300 million per month in the past few months, which shows how rapidly online sales are catching up with with physical games' 840 million per month.

Re:The answer - not for decades (0)

Anonymous Coward | more than 3 years ago | (#34914758)

The facts from their own chart: 10 billion in physical game sales vs 200 million in app sales.

Let me stop you right there.

I followed both links and looked at all their graphs. They are all comparing online purchases of applications to online purchases of music.
Nowhere do any of the graphs or charts display information related to physical sales or gaming specifically.

Now, feel free to continue whatever pointless rant you were on.

Re:The answer - not for decades (1)

fasta (301231) | more than 3 years ago | (#34914852)

The facts from their own chart: 10 billion in physical game sales vs 200 million in app sales. Even if it increases by 200 million a year, it will take a long time to catch up.

Not $200 million/year, $200 million per month. Compared to 840 million/month ($10 billion/year) for the physical game market.

Of course, people with non iOS game hardware will keep buying games, and the App store will expand the market. But it seems to be a new force.

tomhudson the wannabe computer expert, lol! (0)

Anonymous Coward | more than 3 years ago | (#34915220)

tomhudson is the wannabe expert on computing. We are so impressed (not). tomhudson, face it: You're a nobody in the science of computing. tomhudson, You're merely nothing more than a trained chimp that uses the tools others make for him and you try to pass it off like you actually know something worthwhile? Please.

tomhudson we'd like you to answer a question (0)

Anonymous Coward | more than 3 years ago | (#34915538)

http://slashdot.org/comments.pl?sid=1952834&cid=34915292 [slashdot.org] , and answer the question there at the url where it was asked of you, tomhudson. I get the feeling that tomhudson is talking out of his ass again as is his usual, on things he has no experience or clue in (such as actually having a CSC or CIS degree to his name), and yet he's talking as if he actually has taken and passed the entire gamut of coursework for a degree in the computer sciences? Let's see if he actually has said degree(s) and let him answer the question that was asked of him in the url above!

I hope not any time soon (1)

Freaky Spook (811861) | more than 3 years ago | (#34914118)

I enjoy the competition that many different retailers bring to the market, and also being able to buy second hand.

The convergence of all media to digital stores where you have no rights at all scares the hell out of me because of the lack of regulation governments put on digital sales to protect consumers.

The thought of a world where games/movies/music/books/news being controlled by Apple/Microsoft/Amazon/Google doesn't seem like a very nice place.

Math looks solid (1)

Dr. Hellno (1159307) | more than 3 years ago | (#34914150)

Just eyeballing their figures, 4 years sounds plausible. Let's theorize:

Are sales of physical media still a good approximation of the health of the traditional games industry?
How do steam and the console services compare to the itunes app store in terms of income?
Will itunes application sales continue on this trajectory, or level off as the ipad and iphone reach saturation?
Are there really many valuable ideas still to be expressed in app form?
Will iphone-game consumers ever migrate significantly to traditional gaming platforms?

So many questions! So few answers.

So physical music is dead? (1)

m50d (797211) | more than 3 years ago | (#34914190)

That article's written as if digital downloads have already killed physical music sales. But my local HMV's alive and well. So how true is its "we all know how that one played out"?

Re:So physical music is dead? (1)

Khyber (864651) | more than 3 years ago | (#34914308)

Hollywood Music Video tends to carry more obscure stuff, and thus remain in business because their stuff is less likely to be widely pirated like a big business film.

Very much the model of the Black Lodge video in Memphis, and they carry the obscure of the obscure.

Re:So physical music is dead? (1)

clickclickdrone (964164) | more than 3 years ago | (#34914318)

HMV posted another disasterous quarter and are closing 60 stores in the UK. Sales aren't that great.

Re:So physical music is dead? (1)

kyz (225372) | more than 3 years ago | (#34914344)

Physical music sales don't know they're already dead.

Check out this graph of music sales by format, 1973-2008 [nytimes.com] . You can clearly see that each format grew, peaked, then was pushed to death by some new format. Cassettes killed vinyl. CDs killed cassettes. Digital downloads, provided they don't suddenly drop (and there's no indication that they will) are going to utterly kill CDs in the next few years. Since 1999, music publishers have made less and less money from CD sales.

Sure, you'll still be able to buy CDs - even in reasonably sized shops like HMV. There are any number of vintage vinyl shops trading today. But it's not where most of the money in selling music will be; the billions. That will be digital downloads.

Re:So physical music is dead? (1)

Dr. Hellno (1159307) | more than 3 years ago | (#34914392)

Most of the other formats were killed by something that was better, though. Downloads don't revolutionize music consumption in the way the cassette did, and they actually reduce sound quality unlike the CD (they don't have to, but itunes downloads do). On the other hand, they are cheaper. Maybe that's enough? I Still don't think it's a forgone conclusion. History clearly favors obsolescence, but it's hard to say if the CD fits the pattern.

Re:So physical music is dead? (1)

!eopard (981784) | more than 3 years ago | (#34914456)

Donwloads are more convenient as they take up so little space when compared to physical media such as CD's, plus they are easily integrated into something else you were already carrying - your mobile phone.

Sure quality may be a bit lower, but how can you tell when listening to music through cheap earbuds?

Re:So physical music is dead? (3, Insightful)

kyz (225372) | more than 3 years ago | (#34914462)

Downloads don't revolutionize music consumption in the way the cassette did

Are you kidding?

Cassettes allowed portable playback - great. But digital downloads just made impulse buying possible. You can buy anywhere, anytime. It's not convenient to buy from a physical music store unless you're already in one.

Re:So physical music is dead? (1)

mangu (126918) | more than 3 years ago | (#34914658)

Very interesting graph, thanks. Do you happen to have a link to the raw data for this?

One important point there, until the 1990s sales were growing year by year, then they suddenly dropped. Total sales from new formats is nowhere close to what CDs brought in their peak.

It seems like the RIAA is right in that downloads are hurting their income badly. I like that. I cannot see an ethical justification for all those billions going into the music industry like that, without any benefit to the public or to the artists.

Line fitting much? (1)

hardtofindanick (1105361) | more than 3 years ago | (#34914220)

If you get rid of the outliers red line's slope is much less steeper. We clearly need more data.

Re:Line fitting much? (1)

Moridin42 (219670) | more than 3 years ago | (#34914364)

They're also comparing apps from an app store to games on disc, as if those two markets were directly competing. I got news for the author; they're not.

Second.. they're also basing their estimate of when apps will overtake game sales on the assumption that physical game sales are shrinking, because last year was down 5%. Although they conveniently don't mention that for roughly the same period, both song and app sales revenues also had declines. See those nice well-below-the-pretty-line data points in the graph?

Spectacular scholarship on display in the article, I must say.

Re:Line fitting much? (1)

mangu (126918) | more than 3 years ago | (#34914842)

However, if you do consider the sep-10 outlier, the red curve looks more like an exponential function than a line. OMG, song incomes have already been surpassed by app sales!

If you count all downloads as apps (1)

Khyber (864651) | more than 3 years ago | (#34914300)

Since they are all applications of a computer architecture, you could argue they already have, with advent of Steam and other online stores selling software.

Say it with me... (1)

awestruk (1667899) | more than 3 years ago | (#34914326)

Thou shalt not extrapolate based on a recent change. Source: xkcd.com/605/ Really, why does slashdot even publish this garbage? Are their content managers outsourced to China?

But... (1)

awestruk (1667899) | more than 3 years ago | (#34914346)

I like the physical media. Who doesn't like the trophy shelf of the vids a gamer has conquered?...chicks dig it : )

Re:But... (2)

jakobX (132504) | more than 3 years ago | (#34914840)

I would mod you up if i could. I also prefer physical media. Sure nowadays its pretty much only an empty dvd box, but atleast it feels like you bought something. Digital doesnt give me that feeling. I might as well torrent it.

Man i wish the old cardboard boxes and big manuals were still standard.

XKCD: Extrapolating (-1)

Anonymous Coward | more than 3 years ago | (#34914498)

http://xkcd.com/605/

Steam (3, Interesting)

sunderland56 (621843) | more than 3 years ago | (#34914582)

What do you consider Steam? [steampowered.com] It isn't physical media, and it isn't the Apple app store either.

Steam probably sells a sizeable percentage of all video games right now, and is steadily increasing it's market share.

Re:Steam (1)

dwightk (415372) | more than 3 years ago | (#34914874)

Yeah, I'd guess if you added steam's sales to the slope, non-physical games sales would overcome physical games sales even quicker.

Buttons (3, Insightful)

MasaMuneCyrus (779918) | more than 3 years ago | (#34914652)

I've said it before and I'll say it again:

The video game industry is not in danger until all these phones with games start getting dedicated buttons for those games. Touch screens and motion controls do not now, nor will they ever replace buttons.

Re:Buttons (0)

Anonymous Coward | more than 3 years ago | (#34915094)

Buttons are so old tech. I suggest you stick with your stone axe.

Re:Buttons (1)

jedidiah (1196) | more than 3 years ago | (#34916262)

That sounds great until you're fighting a deathmatch with dinosaurs using stone axes.

How about story mod points? (4, Insightful)

Zenin (266666) | more than 3 years ago | (#34914668)

Seriously, comment mod points are..umm...pointless, when the stories themselves should be modded -1.

How does this half-assed amateur blog nonsense make it to the front page of /. anyway? Is it really that slow of a news day for tech? Sheesh...

Apples to overtake oranges. (0)

Anonymous Coward | more than 3 years ago | (#34914686)

News at 11.

Anecdotally (2)

ledow (319597) | more than 3 years ago | (#34914744)

Well, I've stopped buying games that come in boxes. Several years ago, in fact. There are several factors: Availability, Price, Convenience, Backup/Returns being impossible or worthless anyway, and Impulse-buying. I don't really use App-stores at all (I have no Apple devices) - the nearest I get is Steam but is that really an "App-store"? I think possibly the WiiStore might count but the same holds for that as for Steam. Anything PC that I buy tends to come from digital sources, though, because I need to be able to move it between machines and have it follow me for several years (all my Steam games have followed me perfectly since 2003, so they have a much better reputation already than 99% of the app-stores, eBooks, music-stores, etc. out there).

1) Availability: Most of the games I've bought, I do *not* see on shelves in stores. That's if I bother to go into a store at all. Can you buy Altitude in a shop? No? Why not? World of Goo is available for the Wii but I've never seen it in amongst the Wii games at any shop I've ever been in. Because physical media production and distribution is expensive, and because shops decide what to sell (which means high-margin products mainly), and because the "PC" section of any games shop is shrinking by the day. Can I get GTA (the original version) or Quake? No. As soon as a game is a year old, it disappears and only re-appears in supermarket "bargain basement" stands costing almost as much as it did new.

2) Price: Most download games can be had much cheaper. Whether they are brand new or years old, they are usually cheaper online as a download. I don't need the boxes, the manuals, the flyers, etc. If I *really* do, I can just print them off from a PDF - the money I save by not having the maps printed by the games publisher is much more than the cost of printing out only the maps that I *DO* actually need. I throw the boxes out because, after decades of keeping them all, I've realised that I *NEVER* use them and only need the occasional manual for copy-protection. They also damage much more easily than an original install disk (and copy) placed in a proper disk storage case and kept safe. My entire software archive since my first CD-drive (and several dozen floppies) can fit into a box under my desk - approximately the same size as 10-15 games if I were to keep the boxes. The only thing I need to buy is a storage medium in a container - a DVD or CD case fits that description, or a USB key, but a lot of games only come in A4-sized thick boxes.

3) I have to go to a shop. Find a physical box of the exact type I require. Make sure it exactly corresponds with the game I want and is for the right platform. Take it to the counter. Have some guy put his sticky fingers on a disk that they ripped out earlier in case people stole it. Carry it home. Unpack it (so the packaging has a journey of about an hour). Throw the crap away. File the manual somewhere (or more likely just throw it). Take the CD and *carefully* make a copy (if I can) or install it. Then put that CD into some sort of case for long-term storage so it won't get damaged (and which doesn't take up the whole room). Or I just could click the link on something like the Steam / GOG.com store and have it installed within ten minutes while I'm using the computer for something else. When I'm done with it, I delete it. If I want it back, I double-click it (or at worst download it again). If I want to back it up, I copy a folder/file it into my normal backup paths. If I want to move it to another machine, I just double-click it from the other machine.

4) Backup/Returns: A lot of games can't be backed up from the CD / DVD. If I do, they often require hideous hacks that can affect the game and/or online accounts. With digital downloads (as counter-intuitive as it is to anyone who worries about DRM), I can back them up and restore them on other machines quite easily. If there's a problem with a game I've bought, it's usually only a) physical disk is broken or b) software is broken. If the physical disk is broken, I have to send it back. With digital downloads, it's not a problem anyway. If the software is broken, good luck getting a refund in either case.

5) Impulse-buying: It's rare that I see a boxed application anywhere and think "Oh, I'll buy that". With digital downloads, I often have a few pounds to spare and go off to FIND a game I can play there and then, or I click on a link and think "Yeah, that looks good" and end up buying it. I bought Minecraft after playing it in a browser. I bought Altitude after playing a demo online. I bought several games from things like Steam sales because they were *so* ludicrously cheap it was silly not to and if I get an hour's enjoyment out of them, my money was well-spent. I haven't even installed most of those but there are there for a rainy day because of a series of impulse buys. (Incidentally, I estimate that I have 200-300 hours of potential gameplay just sitting on my Steam account waiting to be installed at the drop of a hat, when I get bored with what I already had)

If Steam did applications, it would be perfect. I'd *PAY* for a nicely packaged version of OpenOffice that takes my settings with me wherever I go and works on every computer with just a double-click, as daft as that sounds (and yes, there are PortableApps but often the point is that I don't want to have to hunt them down and install them manually or carry a USB key). I'd pay to have programs like Paint Shop Pro and the handful of other non-free apps that I use regularly follow me around too (sell the older versions that I'm most fond off, and I guarantee a sale!). So if you use an iPad / iPhone a lot, I can understand using an app-store instead of physical software.

But physical software sales are really bringing about their own doom. Outside the console markets, they're completely dead. And the console that comes with a built-in 3G connection (only to an app-store, obviously) as part of the purchase price will sell a million. Rarely are physical digital items priced anywhere near sensibly (go have a look at the people looking on Amazon at the game they are holding in their hands, and that's for a physical copy POSTED to their door), they can't compete on range, they can't compete on convenience and so they make up for it by trying to push that it's a "Limited Edition Box" (WOW!) or some such nonsense. And in a month's time, nobody will care and in a few years, you'll be throwing that box out with the rest of them anyway. The only box I could ever imagine myself keeping would be one around a game that I was involved in - not just testing, but had actual code on the CD inside the box. And that's more a personal thing - you'd never really be able to sell it on eBay for any more than an ordinary box.

Digital media is a perfect idea - copy a digital product, license it to users with a minimum of overhead, let them keep a secure copy in a safe place "forever" and know they can retrieve it without hassle. They even end up rebuying it quite often, the same as before. Why on Earth should a modern software installation require anything more than clicking a single button?

I bought my parent's (mad gamers!) a Steam account this year with a handful of games. They got a new laptop for themselves at the last moment. I give them the link and the account details, they can download and install their entire library of favourite PC games. They see me playing something and like it, within five minutes and two clicks on their end I have bought it, sent it to them and they are playing it (and dad's giving me the cash because he doesn't use credit cards). They wouldn't even know where to put the disc, let alone track down a copy, buy it, install it, etc.

Digital media is popular because it works. As long as it keeps on working, it'll get more popular. The only hurdle is DRM and stupid restrictions (i.e. can't move WiiStore games from one Wii to another, can't retrieve your music if the company goes bust, etc.) If they don't mess it up, physical sales will be dead and niche quite soon. I don't mean "eliminated entirely", just as dead as vinyl. You might buy some for a special gift, or if you don't "get" all the modern stuff, or as a collector's item, but otherwise it's just dead. I haven't inserted an install CD in my computer in years, except bootdisks.

Duh (0)

Anonymous Coward | more than 3 years ago | (#34914784)

I would have thought that Apps already had overtaken. I've not bought any physical media games in .... over a decade? Download, legally. Most vendors have been selling their software online for a loooong time.

but i'm on satellite internet... (0)

Anonymous Coward | more than 3 years ago | (#34914812)

...with a pitiful transfer cap you insensitive clods!

Not Gonna Happen (0)

MogNuts (97512) | more than 3 years ago | (#34914906)

I don't know about this one. Yes, for little mini games, indies, smartphone games, etc it will. And yes for the PC. But no for the console. It just has a different demographic. People who buy consoles typically want a plug and play experience. They WANT to go to a store that day and as soon as they get home, literally just pop it in and play it (not that Steam isn't as good, but they need the "going to the store experience").

Two, the sizes of the games. Here in the U.S., many times we're unfortunate to have caps. 250 GB mind u seems the norm, but that fills up quick with downloading 8 GB games, 4 GB movies, streaming 4 GB movies. It may work for a shitty little game on iOS that's only 50 MB, but not for a 10 GB AAA game.

Lastly, I hope that we always have physical disks because we need the used secondary market. Otherwise, no matter how I love the service, we'll have a rehash of Steam or XBL. Games that are 4 years old selling for $30, when they should be $5-10. And new games only out 2-3 months, which the retail box is only $30, will still be $60.

Theres new kid in the block (1)

iinlane (948356) | more than 3 years ago | (#34914924)

Apple faces fierce competition from Steam. Valve has almost unbelievable sales. Last Christmas they sold indie packs with 93% discount - to put it into perspective: they took a pack of 5 indie games and made 50% discount and then again 50% and again 50% and finally 44% discount. I wish I could buy a house with such a discount.

A telling point that seems to have been missed... (2)

Gybrwe666 (1007849) | more than 3 years ago | (#34914990)

is the fact that we are beginning to accept the term "app" as a distinctly different category/delivery method of software, rather than whatever poor comparisons/facts of the original story. We are now getting to the point where Steam/ITunes/et cetera et al. have become a distinct category of media, even though each one is an "app" in the original sense of the word.

Seems to me that this trend is essentially inevitable, whether it's the game industry or any other category of computer software. Simply put, not having to create, manufacture, and distribute physical media is cheaper, faster, and easier for everyone, and as the percentage of people with acceptable "broadband" speeds (which is pretty low, because it's very likely you'd put up with a 6 hour download of a big game in the background) increases, the drive to move away from physical media benefits everyone.

So, move along, no real story here, just some journalist looking to get paid by the word to repeat the obvious.

Sounds familiar... (0)

Anonymous Coward | more than 3 years ago | (#34915532)

Did anyone happen to see Steve Job's signature on that article?

Price difference (1)

Haedrian (1676506) | more than 3 years ago | (#34915596)

An app costs 1-5 euros or so on average. There are some very good 'app' games which cost less than 3 euros. A video game costs 60 euros when its just come out.

I'm sure many people don't mind going for a day without their coffee and getting an app, then the amount of people who would pay 60 euros - which is quite a bit. Especially if you consider students and teenagers to be large markets. Many of them don't have money to burn.

Its the spending threshold.

So that's about it.

Re:Price difference (1)

jedidiah (1196) | more than 3 years ago | (#34916318)

You also wonder how many of those "apps" will be classics in their own right. A lot of ipad games are simply classics that have been adapted to the PhoneOS platform and perhaps watered down a bit.

Will any of these things be something you want to pick up 10 or 30 years from now and play again?

Will they even be available if you wanted to?

informative GnnaGNAA (-1)

Anonymous Coward | more than 3 years ago | (#34915980)

*BSD but FreeBSD

Hmm (1)

Stooshie (993666) | more than 3 years ago | (#34915998)

The conclusions in the article don't appear to relate, in any way, to the graph they are showing.

The graph shows song sales versus app sales. The article talks about app sales versus something they call "physical video game content sales". WFT is that when it's at home?!
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