PiperJaffray: Videogame sales will be 100% digital by 2022

Gravy Boat said:

You can't play CoD WW2 without downloading the day 1 patch, and that includes the campaign.

It still went on to make more money in 2 months than most games will make over their entire life.

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Congrats, you found one of the very, very few exceptions to the rule in the form of a series that is indisputably on the decline already anyway. Lets forecast based on this outlier, that makes sense. While we're at it, consoles are pretty much dead and 3D no motion no mobile no digital is the future! Analysts win again, gamers!

Mesoian said:

PiperJaffray: All game publishers to ignore rural area revenue whilst simultaneously ignoring telecom trends forcing users away from using large amounts of data.

Just no. Those kinds of claims are ones made in a bubble ignoring the tech industry at large.




Not while AAA games are still clocking in between 25-80 gigs.

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Oh, so that's why nobody uses Netflix. Wait, they do. Netflix clocks in at 3 GB per hour. Your standard game is 15 hours. Which calculates to around 3 GB per hour of gameplay for a 50 GB game. Sorry, I just find it funny when you suddenly don't have 50 GB to spare on a 1 TB cap. And the average user only buys two games a year to begin with. That's 100 GB out of 12.000.

So is it a certainty or is it hard to pinpoint?

100%? In 4 years? Not seeing it.

SmarmySmurf said:

Congrats, you found one of the very, very few exceptions to the rule in the form of a series that is indisputably on the decline already anyway. Lets forecast based on this outlier, that makes sense. While we're at it, consoles are pretty much dead and 3D no motion no mobile no digital is the future! Analysts win again, gamers!

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To be fair, I was asking for outliers because I couldn't think of any.

X1 Two said:

Oh, so that's why nobody uses Netflix. Wait, they do. Netflix clocks in at 3 GB per hour. Your standard game is 15 hours. Which calculates to around 3 GB per hour of gameplay for a 50 GB game. Sorry, I just find it funny when you suddenly don't have 50 GB to spare on a 1 TB cap. And the average user only buys two games a year to begin with. That's 100 GB out of 12.000.

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You forgot the Mortal Kombat 9 scenario where people had to redownload that game in it's entirety multiple times with each patch or the Microsoft Store issue which often glitches out on day 1, causing people to download hundreds of gigs of junk data before actually getting to the game.

Not to mention I didn't even bring up caps, I'm talking more about the people for whom, if they decided to buy something like Forza Horizon 3, which clocks in at around 60 gbs, it would take them DAYS because the only thing available in their area is DSL or worse. That's the much larger issue because unless you're in city areas, the telecom's attitude to their offerings can just be a shrug and a kick in the pants.

America isn't ready for an all digital system. They won't be in 4 years, they won't be in 10 years. We'll be incredibly lucky if we get a 40% rollout of fiber in this country by 2030, and even then, the lion's share of south western states 20 miles outside of major cities will still likely be using dialup or Non-5g cellular.

And I wouldn't bring in "the average amount of game sales" when the lion's share of game sales right now is still front loaded by used games and will continue to be as long as brick and mortar shops exist.

Now if you wanna tell me they won't exist in 2022....I'd be willing to entertain that.

SmarmySmurf said:

Congrats, you found one of the very, very few exceptions to the rule in the form of a series that is indisputably on the decline already anyway. Lets forecast based on this outlier, that makes sense. While we're at it, consoles are pretty much dead and 3D no motion no mobile no digital is the future! Analysts win again, gamers!

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What?

Sampson said:

So if you look at the RIAA report from last year, total physical music sales were $1.5B and streaming was $5.7B. But this is a massive shift from 2016, when physical and streaming were about 50/50 in terms of revenue percentages. I specifically highlighted vinyl because it has a dedicated fan base that I think will be there for a very long time, whereas I suspect most CD buyers will eventually convert to streaming.

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Music is a horrible example though; books, movies, and videogames are much better examples.

Even before streaming I couldn't tell you the last time I bought an actual CD. I would typically just buy a few songs and create my own playlist.

MatPiscatella said:

Since you guys asked so nicely for clarification, here's how we define GaaS currently:

GaaS - Any game where development is conducted for new content (excluding performance patches) to be added to an existing product post-launch. There are two types of GaaS:

1. Live Service Game - Games like Destiny, MLB: The Show, FIFA, Fortnite and World of Warcraft - where content updates occur on a more frequent basis, and can include things like daily challenges or a persistent world
2. Non-Live Service Game - Games like Fallout 4 and The Witcher, which have less frequent updates generally in the form of season passes or expansions

And of course non-GaaS games are those games launched with the only post-launch support being performance patches.

This stuff is still being defined, and some cross-over may exist on certain titles.

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I didn't ask nicely... or at all, I don't care what your definition is. TW3 is not GAAS. Simple as that. You can get a hundred other insiders to back you up, it doesn't mean shit.

Way too early, even 2025 is pushing it as 100% digital

MatPiscatella said:

GaaS - Any game where development is conducted for new content (excluding performance patches) to be added to an existing product post-launch. There are two types of GaaS:

1. Live Service Game - Games like Destiny, MLB: The Show, FIFA, Fortnite and World of Warcraft - where content updates occur on a more frequent basis, and can include things like daily challenges or a persistent world
2. Non-Live Service Game - Games like Fallout 4 and The Witcher, which have less frequent updates generally in the form of season passes or expansions

And of course non-GaaS games are those games launched with the only post-launch support being performance patches.

This stuff is still being defined, and some cross-over may exist on certain titles.

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...I don't know if I would count games merely with a schedule of DLC as GAAS. That seems like shoehorning things into a category they wouldn't really be in.

ArrogantBastard said:

Music is a horrible example though; books, movies, and videogames are much better examples.

Even before streaming I couldn't tell you the last time I bought an actual CD. I would typically just buy a few songs and create my own playlist.

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Music is the best comparison, because there is no difference* between listening to a CD and listening to a streaming service.

A physical book offers an entirely different experience than a digital book. It is a self contained unit. There is a thousand+ year history of book collecting. Having a wall of books in your house is viewed favorably -- you're seen as cultured; intelligent. Having a wall of game cases might impress other hardcore gamers, but most people will probably think you're a nerd.

Movies are a nightmare of rights management. Buy it on iTunes? Hope you have an Apple TV. Want an old movie? Too bad it isn't available to buy digitally. Netflix is available everywhere, but streaming offers only a fraction of the total movies in circulation, and their catalogs are changing constantly. And everyone watches movies. It appeals to every age group and demographic, some of whom are obviously much more digitally-inclined than others.

In fact, games are even more digitally-prone than music because of evolving standards and business models. GAAS, DLC, streaming, free-to-play -- all these trends encourage digital over physical. Music didn't have any of this.

*Unless you're an audiophile with the right equipment, which is not many people.

SmarmySmurf said:

I didn't ask nicely... or at all, I don't care what your definition is. TW3 is not GAAS. Simple as that. You can get a hundred other insiders to back you up, it doesn't mean shit.

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That isn't the way this works man. You don't get to just say, I don't care how many people agree with you it doesn't mean shit.

Ubisoft's strategy for the past two to three years has been simple: Release fewer games, but stick with them longer, hooking players for months if not years after launch. From Ghost Recon Wildlands to Assassin's Creed Origins, Ubisoft's whole lineup is full of these service games, designed to be supported with a regular stream of updates and downloadable content.

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Why Ubisoft is Obsessed with 'Games As a Service'

Again, being a video game analyst must be really easy cause people write about what you are no matter how outlandish

I don't buy it. Not in 4 years at least. There are still too many issues with internet access, speed, data caps etc. (In the US at least) and physical games are still a very large portion of revenue. There's still the ability to milk a lot of money out of exorbitant collector's editions and smaller prints (e.g. Limited Run). Even if/when digital becomes the overwhelming majority of sales, I can't see console makers ignoring the relatively small but very lucrative portion of gamers who want physical copies and will go well out of their way to get them. It might not take the form of a disc forever, but in some shape or form, we won't be seeing physical games disappear any time soon.

ArrogantBastard said:

Why do we still have physical books, newspapers, magazines, movies, music?

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While I don't agree with the idea that gaming will be "100%" digital (100% of anything is a big difference from "vast majority" if we're being literal), I will say that one major difference between games on physical media, and other items on physical media is that with games there's not any sort of real advantage or different feel to the actual enjoyment of the work when it comes to "physical".

Book content inside, say, a hardcover coffee table book vs. reading it on an iPad is a very different experience. Movies routinely have extra quality options on Blu-ray vs. digital/streaming. Music on vinyl has a different sound and feel. And so on. But with games, pretty much all the physical benefits are things that have to do with reselling and packaging and how the game data gets onto your console, and nothing to do with the game itself. God of War on a physical disc doesn't have higher quality textures or play any differently than God of War downloaded from PSN, for example (in fact, the "physical-only" version is often worse quality, since it's generally static and doesn't get any fixes or added content).

Video games themselves are inherently "digital", so it would make sense that they're interpreted differently. In a hypothetical world where disc media doesn't exist, the actual art form of gaming doesn't suffer, from a quality perspective. Sure, gaming can still very much suffer from external business and political decisions, but there's no technological drawbacks or loss of progress that would occur with games if physical discs completely disappeared. In addition, for some "emerging markets" that don't really take part in console games currently, physical media could be argued as getting in the way of progress (if someone just owns a phone or a tablet, how is a slavish devotion to plastic discs benefiting them?)

It's why I personally don't have any sort of desire to hold onto physical discs so tightly when it comes to games. I agree that bandwidth caps, DRM, lessened resale rights etc. are issues, but ultimately, those issues need political solutions (I have some fun theories with neoliberalism that I could apply to this discussion as well, lol).

I hope not. Not unless digital game follow the rate in which physical games get lower prices and way more sales discounts.

ArrogantBastard said:

That isn't the way this works man. You don't get to just say, I don't care how many people agree with you it doesn't mean shit.

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Oh? Well I just fucking said it. What now? A game doesn't become a service because some industry guy says its so.

SmarmySmurf said:

I didn't ask nicely... or at all, I don't care what your definition is. TW3 is not GAAS. Simple as that. You can get a hundred other insiders to back you up, it doesn't mean shit.

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You can disagree with his definition of GaaS without being an ass about it.

SmarmySmurf said:

I didn't ask nicely... or at all, I don't care what your definition is. TW3 is not GAAS. Simple as that. You can get a hundred other insiders to back you up, it doesn't mean shit.

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Pleasant.

SmarmySmurf said:

Oh? Well I just fucking said it. What now? A game doesn't become a service because some industry guy says its so.

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But it stops being a GAAS if you say so?

SmarmySmurf said:

Oh? Well I just fucking said it. What now? A game doesn't become a service because some industry guy says its so.

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It isn't some industry guy, it is the vast majority of people covering the videogame industry. I guess I'll just use the definition of random internet guy.

It's inevitable that digital will soon become the majority of software sales. Just like movies and music. Physical will be reduced to premium limited editions at some point.

ArrogantBastard said:

It isn't some industry guy, it is the vast majority of people covering the videogame industry.

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That doesn't lend any credibility to just deciding something counts as a service when it factually is not.

The day consoles go digital only is the day I stop gaming on them. The prices for digital games on consoles is ridiculous. I'd possibly consider being a pc only gamer as the prices seem to be a lot lower.

The movie/music examples, while good at demonstrating they'll always be a niche physical market even in an near total digital market, probably understate gaming's longterm move to digital IMO. In both the movie and music industries, most of the major players have literally done everything in their power to limit digital distribution in fear of decreasing margins. In the gaming industry the exact opposite has happened; Microsoft and Sony are pushing digital harder then ever since they control the platform and can actually increase their profits by cutting distribution costs.

killerrin said:

This is really just a USA Issue. The rest of the world has either already dealt with this or has plans to deal with this in the near future. As for Net Neutrality, only America is having problems with that.



Xbox has already solved it. They got backwards Compatibility on OG Xbox and 360 games through a software emulator, and keep on adding new games to it every month. Given they already got the software written for it and how much money they pumped into the system, they aren't likely to drop it for future generations either.

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For Xbox, it is free to play previous gen games as long as you have the disc correct? Is it also free if you previously purchased said game on the 360 digitally?

jett said:

It's inevitable that digital will soon become the majority of software sales. Just like movies and music. Physical will be reduced to premium limited editions at some point.

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At some point. Sure.

4 years? HELL no. 10 years? HELL no.

Not unless we find discover some new cheap form of telecommunications that doesn't get instantly swallowed and mothballed by the existing telecom conglomos.

Those "analysts" with their linear trendlines!

Mesoian said:

At some point. Sure.

4 years? HELL no. 10 years? HELL no.

Not unless we find discover some new cheap form of telecommunications that doesn't get instantly swallowed and mothballed by the existing telecom conglomos.

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The split between physical and digital keeps shortening at a rather quick pace with each passing year. It'll be sooner rather than later..

Well, no, obviously we won't be at 100% digital by 2022.

We will get there eventually though.

I've gone all digital, its just so convenient.

SmarmySmurf said:

That doesn't lend any credibility to just deciding something counts as a service when it factually is not.

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So what is GAAS then?

ArrogantBastard said:

Yah, I mean look at books and movies. No one buys those physical anymore either.

The infrastructure isn't there, it isn't close to there man.

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Books is a weird comparison to make. But movies will also definitely become all digital.

I totally agree. The infrastructure isn't there and we're not even close. I'm just saying, we'll get there, whether it takes 25, 50 or a 100 years. It's just my belief. Physical is eventually going away for good.

Show this to my grandchildren if I turn out to be wrong.

jett said:

The split between physical and digital keeps shortening at a rather quick pace with each passing year. It'll be sooner rather than later..

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It might double, but as I said, the ceiling is just going to be too low due to the terrible nature of our basic infrastructure.

I think either MS or Sony will go all digital next gen.

I think it's safe to say... This will not be the case. It's gonna happen though, for sure, just not within the next 4... 5.. 6... Etc. years.

Dark Cloud said:

I think either MS or Sony will go all digital next gen.

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Considering that's 2020, there's no chance in hell.

Misleading title.

He clearly says approximately 100%, since it will never be 100%(just like how PC gaming is approximately 100% digital, but not entirely no matter how close it is).

The trend is clear, and anybody denying it is just trying to will it away since they are stuck in the past.

I dont agree that 2022 will be the year we reach that number, since i think the next gen of consoles will still have an optical drive(especially XB since they like to have BC) but i can definitely see the one after that ditching it.(as for Nintendo, the switch successor will still have Switch carts, but its quite possible that the one after that will drop it too, since by then(imo Switch 3 by 2026) memory will be so cheap that a 2tb base model invalidates all need for a cartrige).

Javier23 said:

Books is a weird comparison to make. But movies will also definitely become all digital.

I totally agree. The infrastructure isn't there and we're not even close. I'm just saying, we'll get there, whether it takes 25, 50 or a 100 years. It's just my belief. Physical is eventually going away for good.

Show this to my grandchildren if I turn out to be wrong.

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Yah, okay, I can accept that. However it isn't gonna be 2032, much less 2022. Like I said until a fundamental shift happens with our infrastructure it ain't happening.

It's amazing that this hasn't happened yet. I can't even fathom buying discs in 2018.

Backlash to this will of course be strong on ERA and similar bubbles. But this is the kind of place where a release like Persona or Nioh is huge and stuff like Call of Duty or Madden is mostly ignored. It's a niche minority where the plastic-obsessed are over represented.

Soulja said:

The day consoles go digital only is the day I stop gaming on them. The prices for digital games on consoles is ridiculous. I'd possibly consider being a pc only gamer as the prices seem to be a lot lower.

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I feel like when people say things like this, they haven't looked at the Xbox Live Marketplace or PSN in like 8 years, lol. Also, I've noticed people tend to compare the best case Steam sale prices to launch day console digital prices, as if every AAA game on Steam launches at $20 or something.

I think it's fair to say that Steam/Gog certainly has a longer history of big game sales, but in 2018, there are plenty of weekly and seasonal sales of games anywhere from 10%-70% off on Xbox Live or PSN.

ArrogantBastard said:

So what is GAAS then?

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The words Games as a Service already all have meanings, and put together as a phrase can only have one meaning. Our "industry friend" above and anyone else trying to label TW3 a service is doing so to normalize predatory practices, and its disgusting how many of you are happy to not only just accept it, but fight for it. I'm done with this topic, frankly no one playing defense for the industry on this matter is worth the mild aggravation.

Not if Comcast is still enforcing data caps.

I'm so ready. Can't wait.

SmarmySmurf said:

Since you didn't actually answer me, I'm going to assume that, no, a typical game like AC Origins or Arkham Knight or whatever does not sell 50% + units digitally. Sorry, IDGAF if services and indie crap push the revenue up in digital's favor, that isn't relevant to the topic. If the average AAA game is still selling more physical units, physical is safe for a good long time, and it isn't limiting the conversation at all.

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SmarmySmurf said:

Congrats, you found one of the very, very few exceptions to the rule in the form of a series that is indisputably on the decline already anyway. Lets forecast based on this outlier, that makes sense. While we're at it, consoles are pretty much dead and 3D no motion no mobile no digital is the future! Analysts win again, gamers!

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SmarmySmurf said:

I didn't ask nicely... or at all, I don't care what your definition is. TW3 is not GAAS. Simple as that. You can get a hundred other insiders to back you up, it doesn't mean shit.

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Drop the attitude. If you can't behave yourself why even be here? Most people have their systems connected online and it is true, we are seeing more and more AAA games require patches along with some form of online component to it. We are also seeing developers push the whole idea of keeping gamers engaged longer.

Yoshi said:

From the past ten years, retail-only? Probably yes.

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I doth my cap to you.

I won't be buying new releases much any more then. At least not console. I don't like being stuck with a full priced game I might not like.

God the amount of people who say they will stop playing video games is silly. That being said, I think it will have an unintended effect, in that there will be a lot less "day one"/early sales than there are now with people waiting for deeper sales. So they'll either have to sell games cheaper, or lose more high cost sales. Which then kind of defeats the purpose. Unless they give us a digital resale option, which I just don't see happening.

Also it's completely discounting the people who will avoid digital titles due to data caps, speed limitations etc.

So I don't think 2022 is likely.

SmarmySmurf said:

The words Games as a Service already all have meanings, and put together as a phrase can only have one meaning. Our "industry friend" above and anyone else trying to label TW3 a service is doing so to normalize predatory practices, and its disgusting how many of you are happy to not only just accept it, but fight for it. I'm done with this topic, frankly no one playing defense for the industry on this matter is worth the mild aggravation.

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Can you simply provide me with the meaning then? Cause I have a feeling you think it only means micro-transactions, which isn't the case at all.

ArrogantBastard said:

So what is GAAS then?

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IMO - A product who's lifespan and core revenue stream is dictated by regular participation of the user in engaging with new, regularly released content. Overwatch lives and dies via its content release cycle and loot box purchases, it's initial buy-in being dramatically less of a factor of the game's overall worth to its publisher compared to its regular roll-out of content. Battlefield 1, for example, is sort of the opposite, it's worth sort of hinging on the value of a decided amount of DLC that likely will not exceed 6 months and servers more to add value to it's original MSRP which is steadily increasing through things like season passes.

I think there are a lot of companies that want to have it both ways, like Activision with Destiny 2, a game that's attempting to divy up it's post release content into DLC-esque chunks, but the chunks aren't adding enough to the overall experience of the game, so they're passing it off as a GAAS update schedule when it's really not, all the while asking players to buy loot boxes. It's a hard thing to really define which is why a lot of people run into trouble when it comes to what they're trying to offer versus what they're actually offering versus what the players are expecting them to offer.

At most itll finally pass that 50% mark on everywhere except Nintendo.