Support NeoGAF

[Obliterator]

I doubt it's anything but low. Nintendo doesn't talk about digital because they have absolutely nothing to discuss when it comes to it.

It's not a mystery. We know how much revenue Nintendo has been earning from the digital space, just like we know how much Sony is, because they report it in their financials.

Does the graph include psn subcribtion fees in there? Will be interesting to see if Nintendos rises at all when their paid service launches

Yes the Sony number includes PSN subscriptions, which is a major revenue driver. Nintendo should se some serious growth once they start charging for online on the Switch.

Also worth noting its not like Nintendo isn't seeing ANY growth in the digital space. They are, its just lagging behind the rest of the industry. They were also the only publisher I'm aware of who's digital growth was actually down in 2016. In fact their growth in that space could be bordlerline considered anemic compared to the rest of the industry

Courtesy of ZhugeEX again, he posts the best charts with the most relevant info

https://twitter.com/ZhugeEX/status/819733179426803714

 

[ChronotriggerJM]

That graph says eShop and PSN, so it's referring to all devices purchasing on it yes?

 

[Obliterator]

That graph says eShop and PSN, so it's referring to all devices purchasing on it yes?

Of course.

Why are there people thinking Digital should only equal full priced $60 games sales.

This is a very common problem you see on GAF when talking about the industry. Digital spend is still revenue. Whether that is on subscriptions, games, DLC, or anything else. Its still high margin revenue. I mean any way you cut it they are behind the average. As I noted above, they were also the only publisher / console manufacturer I'm aware of who's digital share was trending down in 2016

 

[hanspampel]

That graph says eShop and PSN, so it's referring to all devices purchasing on it yes?

yes. those numbers are from earnings reports
neither Sony nor Nintendo do disclose or make a distinction, wenn it comes to reporting, where you buy their digital offerings from. and why would they?

Of course.

Why are there people thinking Digital should only equal full priced $60 games sales.

This is a very common problem you see on GAF when talking about the industry. Digital spend is still revenue. Whether that is on subscriptions, games, DLC, or anything else. Its still high margin revenue. I mean any way you cut it they are behind the average. As I noted above, they were also the only publisher / console manufacturer I'm aware of who's digital share was down in 2016

the Microsoft "digital transactions" $1 billion figure from last quarter is without subscriptions.
but still does include MTX and DLC

 

[jdstorm]

Also the WiiU rarely if ever has flash sales. On PS4 they lead to 90% of my digital purchases. I usually prefer physical, but if a new ish AAA is $15 or under i will probably buy it.

 

[Shpeshal Nick]

While they misfired on the execution, I'm sure Microsoft probably had some inkling this trend was happening and decided to jump ahead a little on ushering in that digital future while still letting the physical crowd have theirs.

 

[Obliterator]

While they misfired on the execution, I'm sure Microsoft probably had some inkling this trend was happening and decided to jump ahead a little on ushering in that digital future while still letting the physical crowd have theirs.

A lot of MS ideas for the original Xbox One actually weren't too awful, in terms of where the industry is headed.

The main problem was the were too early on that train, and also the forced messaging. The entire industry is slowly moving towards the direction they were envisioning anyways by itself naturally. The big issue for MS is they aggressively tried to force this onto consumers instead of letting the market deciding that for itself. They thus, rightly, got a huge lashback for it.

 

[Memorabilia]

Halo numbers?

I still prefer physical.
But if it's a really good deal, the only deal, or a game I know I'll always want on standby I go digital.

Cash is king, and I get better prices on physical typically.

Personally, this is where I'm at in my preferences/buying habits as well. Digital is nice for the "juke box" convenience...but digital pricing generally sucks compared to physical, so I usually only buy digital on deep discount months/years after a game releases. Plus, I still enjoy the collecting aspect.

That said, there's no denying digital is growing steadily. The not-so-surprising stat that's still somewhat eye-opening despite its obviousness is the % of profit from digital given the 70/30 physical-digital sales breakdown. It's a bit of a "no shit, Sherlock" stat given the lack of overhead with digital (manufacturing, distribution, profit sharing w/ middle men, etc) combined with the typically higher than physical digital prices.

Caveats: 1) I still think we dont have the full picture as this article may be overestimating digital revenue on console games due to the inclusion of subscriptions and mobile revenue which heavily skew the results (and as others have noted, Sony et al are not sharing digital revenue in many/most cases); 2) Digital growth in large console games will necessarily be limited at least somewhat as we move forward by the lack of adequate internet bandwidth and/or data caps for 10s of millions of consumers. This is a problem that isn't going to be solved anytime soon, especially in the States, due to the absolute lack of political will and even antipathy towards improving the "commons", especially when it comes to large public works projects such as upgrading the nation's internet infrastructure. In short, that ain't happenin anytime soon (if it happens in our lifetime I'll be surprised, but let's say a minimum 10 years to build out if we started planning *now*). Unless/until this is solved, there's a very real cap to digital growth for the foreseeable future.

 

[More_Badass]

Why exactly do you need it?

Why not? We know the exact box office grosses, number of screens, and other data for everything from tentpole blockbusters to limited release indie films. Among other mediums

Why are games special, and why wouldn't you want that data?

 

[leeh]

A lot of MS ideas for the original Xbox One actually weren't too awful, in terms of where the industry is headed.

The main problem was the were too early on that train, and also the forced messaging. The entire industry is slowly moving towards the direction they were envisioning anyways by itself naturally. The big issue for MS is they aggressively tried to force this onto consumers instead of letting the market deciding that for itself. They thus, rightly, got a huge lashback for it.

I'm going to be blunt and say I think it was simply because it leaked and they had to answer questions about it before they were ready to show it.

I think if they actually showed it to people when it was ready, it may of been a different story.

 

[zelas]

Well this just cements what even the underestimated reports already made obvious:

- Most consumers like digital
- Digital is easily taking over the market
- Console makers really need to get their act together and stop stifling its progress

 

[malboroking]

I'm going to be blunt and say I think it was simply because it leaked and they had to answer questions about it before they were ready to show it.

I think if they actually showed it to people when it was ready, it may of been a different story.

We've had this argument a million times on GAF. It wasn't that people didn't understand it or it was leaked or anything like that, it was the implementation that was terrible. The way it was presented you would be locked out of your games if you didn't have an Internet connection. If it was just a used digital marketplace, there wouldn't have been a backlash.

 

[Obliterator]

We've had this argument a million times on GAF. It wasn't that people didn't understand it or it was leaked or anything like that, it was the implementation that was terrible. The way it was presented you would be locked out of your games if you didn't have an Internet connection. If it was just a used digital marketplace, there wouldn't have been a backlash.

Yeah the DRM / forced messaging was the real problem. We are rapidly moving towards a digital focused gaming marketplace. Within the next decade the huge majority of all revenue will be from digital.

MS didn't just try to offer a great digital experience. They tried to make an incredibly closed off system that forced you to be online in some capacity to use content you paid for, and also was largely leaving physical purchasers out to dry. Everything was forced, and none of it felt pro-consumer.

The day a console manufacturer offer a legit trade in / resale system for digital goods on console you will see some massive waves / change ups industry wide. I'm really curious who is going to be the one bold enough to try it first, but you would see consumer spend rocked in some serious ways.

A very strong segment of consumers that are still purchasing physical games are doing so for trade-in / resale value.

 

[leeh]

We've had this argument a million times on GAF. It wasn't that people didn't understand it or it was leaked or anything like that, it was the implementation that was terrible. The way it was presented you would be locked out of your games if you didn't have an Internet connection. If it was just a used digital marketplace, there wouldn't have been a backlash.

We never saw the implementation.

We knew they had to rush the dashboard to rip it all out prior launch, which may be the sole reason it was crap on release.

 

[Shpeshal Nick]

I'm going to be blunt and say I think it was simply because it leaked and they had to answer questions about it before they were ready to show it.

I think if they actually showed it to people when it was ready, it may of been a different story.

They obviously also underestimated people's patience waiting on a real solution to borrowing/trading games.

I'm sure they would have worked something out eventually, but people don't want to wait potentially years for something that should have been ready day one.

 

[M.W.]

So...GTAV is at what...150 million sold now...lol

 

[Memorabilia]

We never saw the implementation.

We knew they had to rush the dashboard to rip it all out prior launch, which may be the sole reason it was crap on release.

The *messaging* was disastrous. Seriously, it's one of the best/worst examples of how *not* to sell a product I've ever seen. University of Oregon actually uses it as a case study in "marketing gone wrong" in their MBA program. No joke.

 

[Ashtar]

So does that mean that gaming revenue ISN't down year over year? or does it mean it was even higher last year and is now gaming revenue is even more down?

The new, ”restated" reporting from NPD shows that spending on game software has actually been increasing steadily since 2010, whereas the previously reported data indicated somewhat of a spending plateau.

Asked and answered

 

[thelastword]

Always knew that was the case...I remember I was having that conversation in several threads when this generation began and the PC folk wasn't having it, but it's true, digital distribution and games have overtaken physical sales especially on the PSN, the convenience is just much better and the frequent digital sales adds to those heightened numbers as well....


I can say for me, that all my games are digital...I actually think the majority of HZD sales are digital...

 

[cartoon_soldier]

Big companies need to stop being little bitches about putting out accurate data on digital. We need it.

It's called quarterly financial reporting. That's the only thing you need if you are a shareholder.

 

[Maintenance]

9 digital friends buying Halo (I think it was that) redeemed.

Wait, we're back to dreaming about the shitty always-online DRM pre-180 Xbox?

My personal theory is that is because enthusiasts and die hards bought the WiiU, and they are more likely to be collectors and traditionalist. With the Switch that will change. Just my theory though.

My personal theory is that Nintendo barely has any digital sales, and the ones they do are so shit you get the feeling they are doing you a favor.

 

[hanspampel]

I can say for me, that all my games are digital...I actually think the majority of HZD sales are digital...

Nahh. Not yet
But it will, as backlog sales are even more screwed to digital than launch sales.


US sales for HZD are >640K retail and >1000K including digital.
US is the region with one of the highest digital penetration.

 

[Cranster]

Where is everyone getting the Halo 5 numbers out of curiosity?

 

[cartoon_soldier]

Nahh. Not yet
But it will, as backlog sales are even more screwed to digital than launch sales.


US sales for HZD are >640K retail and >1000K including digital.
US is the region with one of the highest digital penetration.

Doesn't Europe have better and faster Internet connectivity?

Also, even in Asia people probably buy digital a lot if only because it is just tough to find physical copies of all games not to mention they are cheaper.

I am from India and my last 4 games have been bought digitally. It took 4 days to download Andromeda, but what to do.

 

[Maintenance]

Doesn't Europe have better and faster Internet connectivity?

Also, even in Asia people probably buy digital a lot if only because it is just tough to find physical copies of all games not to mention they are cheaper.

I am from India and my last 4 games have been bought digitally. It took 4 days to download Andromeda, but what to do.

Rest of Asia I don't know, but Japan is pretty strong on physical copies. Media create threads can serve as examples.

 

[Card Boy]

Big companies need to stop being little bitches about putting out accurate data on digital. We need it.

What is the benefit to you? or us unless it's a multiplayer game?

 

[Obliterator]

Where is everyone getting the Halo 5 numbers out of curiosity?

Its a joke / GAF meme from when Halo 5 numbers first came out.

And no it didn't have a digital rate of 90%. Its something people post teasing Leeh for a post they made in that thread

 

[SwolBro]

Well, that one is Sony's issue for not sharing.

Weren't you always posting about how people were wrongfully over-estimating digital sales? Correct me if i'm wrong.

 

[MrMephistoX]

Hate to say it but I have to wonder if any decisions to
scale back on console game development at Studios like Konkani and Disney were partially based on the previously incomplete data.

 

[Maintenance]

Hate to say it but I have to wonder if any decisions to
scale back on console game development at Studios like Konkani and Disney were partially based on the previously incomplete data.

I'm pretty sure they have the numbers, we are the ones that don't.

 

[cartoon_soldier]

Rest of Asia I don't know, but Japan is pretty strong on physical copies.

Yea so is SK I think. But I am thinking China, India, Vietnam, Pakistan, Thailand, etc. Places with very growing young population, getting more money to spend with improving economies and improving internet connectivity. The numbers probably aren't huge, but the future for all these companies is digital.

Think about what the future of gaming will be in Africa. It will be all digital.

 

[Pimpbaa]

And people still wonder why digital prices remain so high... people are buying so many digital games at these prices, that there's no reason to cut into their margins.

Digital prices high? Both digital and physical are the same in regards to new games (in NA). Of course if a game bombs, it's hard to beat those bargain bin prices.

 

[UnemployedVillain]

It's not a mystery. We know how much revenue Nintendo has been earning from the digital space, just like we know how much Sony is, because they report it in their financials.



Yes the Sony number includes PSN subscriptions, which is a major revenue driver. Nintendo should se some serious growth once they start charging for online on the Switch.

Also worth noting its not like Nintendo isn't seeing ANY growth in the digital space. They are, its just lagging behind the rest of the industry. They were also the only publisher I'm aware of who's digital growth was actually down in 2016. In fact their growth in that space could be bordlerline considered anemic compared to the rest of the industry

Courtesy of ZhugeEX again, he posts the best charts with the most relevant info



https://twitter.com/ZhugeEX/status/819733179426803714

That's not surprising considering the lack of Wii U games released in general. I think all things normalized (as in a steady stream of games yearly) their growth if probably following the same trajectory as everyone else's, looking purely at game sales (as they have no paid subscription services yet), albeit at a lower level.

 

[PiFace]

Why not? We know the exact box office grosses, number of screens, and other data for everything from tentpole blockbusters to limited release indie films. Among other mediums

Why are games special, and why wouldn't you want that data?

You are confusing NEED and WANT. We WANT the data, we don't NEED it. It would be nice to know but we don't NEED it.

Having more data is always nice, though.

 

[Obliterator]

That's not surprising considering the lack of Wii U games released in general. I think all things normalized (as in a steady stream of games yearly) their growth if probably following the same trajectory as everyone else's, looking purely at game sales (as they have no paid subscription services yet), albeit at a lower level.

Nintendo's digital software is 19% of revenue in 2016. If we are speaking strictly games without subscriptions they are still hugely back compared to other publishers such as EA, Activision, Ubisoft, Take-Two etc.

They are just behind the industry. That's all there is to it. That will probably change with the Switch though over time.

 

[AnotherDayAnotherDollar]

US sales for HZD are >640K retail and >1000K including digital.
US is the region with one of the highest digital penetration.

Are those numbers confirmed?

 

[Obliterator]

Are those numbers confirmed?

They are from essentially the most trustworthy source on all of GAF.

So depends on how you look at it. In my book they are confirmed considering the source.

 

[Maintenance]

They are just behind the industry. That's all there is to it. That will probably change with the Switch though over time.

It will change because of the paid online, but the shitty barebones account system is still there.

 

[thelastword]

Nahh. Not yet
But it will, as backlog sales are even more screwed to digital than launch sales.


US sales for HZD are >640K retail and >1000K including digital.
US is the region with one of the highest digital penetration.

Yeah but that's US alone and yet, there are so many regions where there's no huge physical store presence and digital is the way to go....One thing is for sure, the thrill of loading your game prior to release and gaming at 12:00 am without venturing into the cold or facing any dangers on the outside is indeed thrilling.

I'm also of the opinion that gamers have changed..I still have boxes of PS2/PS3/XBOG and 360 games packed up...I'm not doing that again...Tbh, I think the fact that steam works so well has really fueled the digital era overlords even on consoles..

 

[Candescence]

Nintendo's digital software is 19% of revenue in 2016. If we are speaking strictly games without subscriptions they are still hugely back compared to other publishers such as EA, Activision, Ubisoft, Take-Two etc.

They are just behind the industry. That's all there is to it. That will probably change with the Switch though over time.

Interestingly, there are a few digital third-party games that sell a lot better on Nintendo platforms - Shovel Knight in particular sold a lot more on Wii U and 3DS compared to other platforms even individually, and I imagine Specter of Torment's timed exclusivity on Switch shifted a lot of copies there as well.

 

[Ashtar]

Hate to say it but I have to wonder if any decisions to
scale back on console game development at Studios like Konkani and Disney were partially based on the previously incomplete data.

I doubt that, if they were actually seeing the return on investment that they wanted they likely wouldn't have killed those divisions off

 

[Memento]

Nahh. Not yet
But it will, as backlog sales are even more screwed to digital than launch sales.


US sales for HZD are >640K retail and >1000K including digital.
US is the region with one of the highest digital penetration.

Is this true? Where did you get that info? If true, wow.

 

[DriftingSpirit]

Is this true? Where did you get that info? If true, wow.

John Harker in the other NPD thread.

 

[jroc74]

Leeh redeemed.

Every time I see a thread about digital this is the first person that comes to mind, lol.

Better late than never tho. With units sold not being really counted anymore I'll take digital as a substitute.

 

[Imp the Dimp]

Big companies need to stop being little bitches about putting out accurate data on digital. We need it.

Why would anybody need that? I'm a consumer, not a shareholder.

 

[Memento]

Why would anybody need that? I'm a consumer, not a shareholder.

Okay, why are you on this thread then? This is an enthusiast forum.

 

[SwolBro]

I'm sure Microsoft probably had some inkling this trend was happening .

Anyone that wasn't a fanboy console warrior knew this was happening. The echochamber during the time though was a marvel to witness. Lurking around you'd see the most ridiculous comments.

 

[jrDev]

Who needs it and why do they need it?

This is a stupid question, you are asking why do people need information?

 

[MrS]

This is a stupid question, you are asking why do people need information?

I am asking why people feel they need to have things which really shouldn't concern them. We don't need every shred of trivial information.

 

[Curufinwe]

I'm going to be blunt and say I think it was simply because it leaked and they had to answer questions about it before they were ready to show it.

I think if they actually showed it to people when it was ready, it may of been a different story.

This is the most ridiculous revisionist history. There's no need now to force always online to buy games digitally and there was no need then. Another six months wasn't going to make their anti consumer plans any more "ready".