Growing digital game sales not enough to compensate for weak retail

Digital game sales are growing in the U.S., but those small gains weren't nearly enough to make up for plummeting software sales at retail during the first three months of the year. The NPD Group's new "Q1 2012 Games Market Dynamics: U.S." report shows that console and PC game sales across retail, digital, and used/rental revenues reached almost $3.4 billion in the first quarter of the year, compared to more than $3.8 million during the same period in 2011. Physical game sales make up the bulk of that $500+ million deficit -- some forecast that physical software revenues are performing so poorly this year, they could hit a six-year low in 2012. This category generated $1.4 billion during Q1 2012, down from $2 billion year-over-year. Sales for digital content (full games, DLC, subscriptions, mobile games, social games) are growing, but not by nearly enough to offset that drop. Digital game revenues grew by 10 percent during the first three months of the year to $1.38 billion. NPD did not publish sales for the specific digital sales format last year, but it said that combined revenues for used/rental games and digital content reached $1.85 billion in Q1 2011. During the same period this year, those two categories generated $1.9 billion (used/rental sales fell by 5 percent). This increase in sales for the digital format supports NPD's recent findings that consumers in the U.S. are becoming more receptive to downloading or buying their games online due to lowered barriers of entry. The firm also published data for three of the biggest European markets -- the UK, France, and Germany -- showing that used/rental sales in those countries came out to $300 million, while digital format sales brought in $959 million in sales during Q1 2012.