In the past year, sales of digital media – downloadable music, films and games – topped £1 billion.
According to a recent report from the BBC, this is an 11.4% increase from 2011. This increase highlights the growing popularity of digital media, in an industry that still relies on sales of physical discs, CDs and DVDs.
In the report, sales of downloadable video games saw the highest increase, at £552 million, which is a 7.7% increase from the previous year’s figures. Game downloads are often preferred due to their convenience and lower cost, which may explain this increase. However, video game retail has taken a hit. According to the New York Times, the US gaming industry saw a 20% decrease in software sales in 2012, following an 8% decrease in 2011.
This is certainly a downward trajectory for a powerful, multi-billion dollar, and multinational industry. How will the prevalence of game downloads affect it, and by extension, the economy?
The Effects of Widespread Downloads
In years past, playing video games required the discs on which the game was written, as well as the hardware to play it, either a computer with the proper system requirements, or a gaming system that hooked up to the television. These items do not come cheap, with the Xbox 360 currently going for around £210 and a single game going for about £30, depending on the developer. To add to the cost, advances in gaming technology created the need for regular upgrades. While it was recognised that gaming was an expensive hobby, many people saved their pennies and joined in.
To contrast, these days it’s possible to download a game for a fraction of the cost. It’s also possible to join a subscriber service to play games online, such as World of Warcraft, which lets players socialise and team up with other online users to complete missions. Other services, such as steam accounts, allow users to download games for free or at lower cost. For example, with a steam account, a player can download Deus Ex: Human Revolution, a top-quality game, at a reduced rate. These services also negate the need to go out and buy a game in a shop, or to have to order online and wait for it to ship.
Additionally, games are becoming increasingly available on phones. The runaway popularity of games like Draw Something and Angry Birds shows that even a simple game that involves flinging little birds at buildings constructed by pigs can be wildly entertaining. The simplicity of these popular games may negate the need for the latest graphics or a complicated backstory.
Game downloads also diminish the need for printed instructional manuals, cover art, and packaging.
Naturally, the diminished need for these aspects of gaming – cover art, packaging, manuals, complex stories and the physical discs – will affect the industry. While skipping these things may lower production costs, the loss of these jobs will certainly be felt. Additionally, many independent gaming stores are now being forced to close due to the popularity of downloads, coupled with stiff competition from online sellers like Amazon. In such a massive industry, there is no doubt that the wider economy will be affected.
Nevertheless, gaming continues to be a popular hobby. No doubt, the industry will adapt to the needs of buyers, and may well land on its feet.