Digital sales surge during retail downturn

Digital distribution sales are on the up and up compared to retail sales, which took a dive for the month of June.

Sales for Steam increased 97 percent year-over-year and larger titles are planned for the service in the future. Direct2Drive sales increased 56 percent, and VP Jeff Steele expects "more of the same into 2010."

Microsoft's Xbox Live also saw a 73 percent year-over-year increase the last six months, but despite all the good news, Michael Pachter says that download sales only make up 5 percent of videogame sales.

"Downloads are probably $1 - 2 billion worldwide this year, compared to a $26 billion packaged goods market. Significant, but not enough to cause a 20% monthly sales decline," Pachter told IGN. "Perhaps a 5 percent incremental impact in a given month, but not likely that the impact was more than that."

NPD Analyst Anita Frazier agreed, saying in her monthly report: "While some of the decline in retail sales could be a migration on the part of consumers to acquiring content via digital distribution, our reports on downloads and subscriptions reveal that it's not yet having enough impact on the console market to be an overly meaningful factor in the retail down-turn."

Figures regarding digital sales may climb a bit more once more publishers start divulging revenue from download services.

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