Top 100: 5. Digital products

 
Sept. 11, 2011

Despite the explosion of digital distribution of music, books, games, movies and software, retail sales are still very much a thriving part of the mix.

According to the NPD Group's most recent "PC Games Digital Downloads: Analyst Report," digital distribution of PC-based games accounted for just 36 percent of dollar sales in 2009, with 21.3 million "full-game" PC titles downloaded through digital distribution networks, and 23.5 million physical units purchased at retail locations.

Frontline digital retailers, who focus on titles that also are offered in retail stores as physical purchases, increased their share of the PC full-game digital download market in the second half of 2009, at the expense of the casual digital retailers, who tend to focus on smaller, easily-accessible games that utilize try-and-buy or advertising revenue models. One of the most significant factors contributing to the decline in share captured by casual digital retailers is the increase in popularity of free social network and mobile gaming.

Although major booksellers such as Barnes & Noble and Amazon are staking out their futures in the e-reader market, a scant 7 percent of online readers in the United States currently read e-books. That figure is expected to double in 2011. A recent report by Forrester Research states that U.S. sales of digital books have grown 220 percent from the previous year's total of $301 million, bolstered by huge increases in the number of e-readers in use; in 2009, 3.7 million were used, while in 2010, the number jumped to 10.3 million. Forrester further estimates that e-book sales will triple by 2015, with more than 29 million e-readers in use.

While print books still make up the vast majority of the industry's revenues — around $23 billion in 2009—that number is in decline, while e-book sales have jumped by double- and triple-digit percentage points every year since 2002.

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Topics: Top 100 Retail


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