Skip to main content

Forecast for Online Sales of Video Games

JupiterResearch forecasts that online sales of games � both digital downloads and shipped package media � will rise from 8 percent of sales today to 19 percent by 2010, which could spark friction between game makers pushing direct sales and traditional retailers.

The U.S. video game market reached $6.8 billion in 2005 on sales of software used by consoles, personal computers and mobile phones, so an 11 point shift represents big money. "People keep thinking of this in terms of one distribution method versus the other, but we don't think that's appropriate," says JupiterResearch vice president and research director Michael Gartenberg. "We think online sales will spur incremental revenues that will grow the entire business, and will clearly benefit retailers. Also, as titles and platforms proliferate, retailers won't have the shelf space for low selling titles that are better suited for online sales anyway."

Online sales have two components. There's mail order shipment of packaged games, plus the same games can also be delivered via download to cell phones and personal computers. Since new generation consoles Xbox 360 and PlayStation 3 come equipped with built-in Internet access, they can easily receive downloads.

Digital delivery allows game makers to directly fulfill consumer orders, thus garnering higher profit margins than selling the same title through retailers. Retailers currently take 5-15 percent of manufacturers' suggested retail prices.

Popular posts from this blog

Think Global, Pay Local: The eCommerce Paradox

The world of eCommerce payments has evolved. As we look toward the latter half of this decade, we're witnessing a transformation in how digital commerce operates, with a clear shift toward localized payment solutions within a global marketplace. The numbers tell a compelling story. According to Juniper Research's latest analysis, global eCommerce transactions are set to reach $11.4 trillion by 2029, marking a 63 percent increase from $7 trillion in 2024. This growth isn't just about volume – it's about fundamental changes in how people pay for goods and services online. Perhaps most striking is the projected dominance of Alternative Payment Methods (APMs), which are expected to account for 69 percent of global transactions by 2029, with 360 billion transactions processed through these channels. eCommerce Payments Market Development What makes this shift particularly interesting is how it reflects the democratization of digital commerce. Traditional card-based systems ar...