Report: Game Distribution to Switch from Physical to Digital by 2022

It’s no secret that the sale of physical media has declined. CD sales have dropped 18.5 percent last year, prompting massive entertainment retail chain, Best Buy, to pull CD’s from its store shelves on July 1, 2018. And DVDs aren’t doing too hot either, with the sale of DVDs falling to 14 percent last year. It should come as no surprise, as streaming has become the method of choice for most people to consume their media, and it seems the popularity of streaming – or, more specifically, digitally downloading – is starting to impact physical video game media in a very real, very negative way. According to a new report by Piper Jaffray Companies, video game distribution will be 100 percent digital by 2022.

Michael J. Olson and Yung Kim of Piper Jaffray have gathered data to compare the physical and digital gaming markets. The data revealed that the physical market is steadily shrinking at approximately 10 points per year. Piper Jaffray commented on this data, saying, “We believe it is a certainty that video games will be ~100% digital in the coming years, and while exact timing is hard to pinpoint, we think 2022 is a realistic expectation.” The report also discusses how additional factors, like the shift towards subscription and streaming models, could lead to a “higher recurring revenue mix” for publishers. “Our expectation is that major publishers will increasingly test and commercially develop streaming game offerings over the next 3-5 years. Streaming games from the cloud, without need for dedicated hardware or massive downloads, would materially grow the TAM (total addressable market) for [high-end] console-style titles.”

This all comes hot off the heels of GameStop’s recent financial woes. The retail chain, at the beginning of June 2018, published its financial report for the first quarter of the fiscal 2018 year. In the financial report, which we covered, it was disclosed that “total global sales were down by 5.5 percent, amounting to $1.93 billion, [and] store sales were down 2.6 percent in the US and 11.6 percent internationally.” In the same month, it was also revealed that GameStop was looking for buyouts, as the company’s stock dropped more than 32 percent last year.

Final Fantasy VII Remake

This was such a surprising no-show of the show, Square Enix has had to soothe worried press and fans that yes, it's still a thing and yes, it's coming along well. Then again, it's not surprising, as it is rather Square Enix of them to mention the remake everyone wants and then show nothing about it for years to come.

Red Dead Redemption 2

There were rumors that Red Dead Redemption 2 was behind super secret double probation doors at E3, but they've since then been squashed. But for something coming out this year, it's rather amazing they showed diddlysquat about this highly anticipated title. No demo. No presentation. It was not a thing on the show floor or behind doors of any kind.

The Rocksteady Project

We STILL have no idea what this mystery project from Rocksteady could be. We have plenty of conjecture and teases, however. All signs are pointing toward some type of Superman game, but we have no concrete idea. The current game director apologized for their E3 absence, and yet emphasized that they'll show something when they're ready, dammit.

Shenmue III

Just a few E3s ago, Sony had the crowdfunding announcement for Shenmue III at their own press conference. Since then, we've had reports here and there on the game's progress, the latest being that the release has been delayed to 2019. Plenty of 2019 games had an appearance at this year's show, but there was nary a word from the Shenmue team.

Borderlands 3

We already knew that Borderlands 3 was not going to be at E3, but it didn't stop anyone from hoping. Gearbox has a release window of between "October 2018 and September 2019," and that's all we've heard about it. I have a feeling that fans would have been happy with simply a teaser poster at 2K's booth.

Rumored Splinter Cell

Fans of this series have been beside themselves over the prospect of a new entry in the Splinter Cell series. Ubisoft hasn't commented that there is anything in the works, only that they're open to returning to the franchise one day. Evidently that one day is not now. It certainly didn't help that Walmart Canada leaked a Splinter Cell listing. 

Square Enix's Avengers Project

Square Enix's Avengers game was also assumed to appear at E3 in some form or fashion. That was a hard NOPE. All we have now is a rumor that it has been rebooted into Avengers Ultimate Alliance.

[Source: WCCF Tech]

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