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Forums - Sales Discussion - Prediction: This is the last decade a game will sell over 10 million physical copies

 

Which decade will be the last a game sells over 10 million physically?

2020's 12 31.58%
 
2030's 10 26.32%
 
2040's 3 7.89%
 
2050's 0 0%
 
Never, physical will live on forever 13 34.21%
 
Total:38
brute said:

I would also say that "gifting" a game is much different than gifting music or movies which will continue to drive physical sales.

When parents buy their kids games for their birthdays or holidays or whatever special event they tend to mostly buy physical, as it brings greater joy when a kid opens the package and sees the game case there.

And the whole switching discs to play a different game isnt as inconvenient with Switch as other consoles. Switch games barely have an install and switching the cards takes a few seconds at best.

This is very true, physical gifts will always be more meaningful than digital because no matter how far technology advances we are still physical beings... Until the dystopian world where we live in the metaverse happens.



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RolStoppable said:
Norion said:

That decline is a notable data point but it's basically a regression to the mean after the pandemic catapulted digital sales. The overall trend is still big growth so I don't think it'll take that long a time to reach over 50%, if it doesn't happen this decade it'll for sure happen next decade. I think they'll follow the rest of the industry on this aspect since the positives heavily outweigh any negatives for them so I expect the Switch 2 to be when digital starts to become dominant for Nintendo. The only thing I can see preventing this is if a large enough number of Nintendo fans are uniquely predisposed to physical to the extent they won't ever switch to digital.

When you say "big growth", are you actually focused on the ratio between digital and physical or are you talking about the number that Nintendo presents as digital sales ratio? Because the latter has been largely driven by NSO subscriptions growing in number.

There hasn't been a big uptick in digital being chosen over physical in recent years, outside of the unique combination of Animal Crossing (a game that gets played for a short time every day has much higher acceptance as digital copy than the average game) and the COVID-19 measures that limited the purchasing options of people. You also have to consider that Nintendo has given various benefits to digital over physical, such as 5-10 times as many gold points or vouchers for first party games, but physical remains the prefered option by a large margin and the digital share has been growing at a modest pace at best. The growth of digital won't be continuous until it eventually hits 100%, because it will absolutely hit a brick wall long before that.

The benefits of physical will remain too strong for digital to be seen as an equal alternative. Physical provides actual game ownership including the ability to lend and borrow without hassle as well as the option to sell. Physical also exists in an open marketplace where a lot of retailers compete for attention and therefore offer better discounts than what you'll find on the Nintendo-owned eShop. Physical is also the only viable option for game collectors which have a much stronger presence on Nintendo consoles than on other consoles.

Believing in digital becoming so big on a Nintendo console that it will prevent 10m+ physical copies being sold means to believe that Nintendo's digital policies will become so good that the vast majority of the market will be okay with buying digital over physical.

The former since the Switch does have a higher ratio for that than the 3DS did. Nintendo is basically a generation behind on that ratio so in a few years or so should get to about where Sony is at now. Physical does have benefits but I think the convenience of digital will win over the vast majority over time. I don't want the benefits of physical to ever go away but convenience is a very powerful force for the masses.

I do believe the vast majority of the market will become ok with that though admittedly Nintendo's policies could slow down that process for Nintendo systems. Their refund policy will hopefully not take too long to get improved.



victor83fernandes said:

Games are getting bigger and bigger and drive space seems to be getting smaller, ps5 is only little over 600gb. Digital will not take off until next gen. Even then, a lot of people will still prefer discs as you have so many advantages to discs.

Digital has already taken off.



Zippy6 said:

The problem here is that the niche in the music market can be catered to easily, as the physical media can be played on any compatible device produced by hundreds of different companies allowing this group of people to be supported by many entities. It's not a "Sony Vinyl" that only plays on the "Vinyl Station 5". In the games industry it would require a single player to continue to support it, the platform holder, and the media produced would be playable on only their one device. Making it an even smaller group and the platform holder has to decide if this group remains large enough to warrant continuing support, especially when digital-only offers many advantage to the platform holder.

Also those music figures you posted show physical accounting for only 6.6% of revenue in the music industry and while vinyl may be growing overall physical is falling substantially which you chose not to include from your article?

"However, the boost in vinyl interest hasn't been enough to keep physical sales from dropping. Physical sales plunged 23% to $376 million"

Vinyl grew 4%, Physical overall fell 23%, Streaming grew 12%.

The core of your belief is that physical software remains in demand and is attributed value from a group of consumers that can't be filled by digital releases. This is of course true, the question is how big this group remains and for how long.

You also mention you only focus on Nintendo only, but if MS/PS do switch to Digital only like PC then the result of the rest of the games industry being digital only may erode the fervent demand for physical from those that play on multiple consoles. Equally third parties that are used to only digital releases on PS/XB/PC will likely only release digital versions on Nintendo even if Nintendo offer physical still.

How low does physical revenue have to drop before a platform holder decides physical isn't worth bothering anymore? Before they decide they don't want to produce, store and organise shipping for millions of boxes around the globe? That they don't want to increase manufacturing costs of their devices by including physical media drive? That the space and weight taken up by the physical drive could be used by something else or just reduce the size, weight and cost of the device? That they don't want to have to think about what storage medium they will use for physical games next generation or worse go through the effort of developing their own? How long before Nintendo see's they get the full $60 from every first party game they sell on digital and push further and harder towards it?

Yes there is inherent value in physical games that can't be replaced by digital, but how many people will still continue to care and how long will it be enough people for the "big 3" to continue supporting when an all digital future benefits them the most.

You're absolutely right that disc-based media will be gone first.

I didn't include more from the article because music and video games aren't similar enough to make it matter, for the reason that actual ownership of a product is a lot more important when the product is more expensive, and that's what video games are in comparison to music. The first half of 2020 was also heavily influenced by COVID-19 measures, so physical as a whole taking a dip isn't surprising.

Xbox and PS heavily emulate PC practices, but Nintendo does not. As I said in my first post in this thread, Nintendo cares about value in their software which is why they keep their game prices high for years, unlike the video game industry which cuts prices fast and often. It won't be a negative thing for Nintendo if third parties forego to release physical games on the Nintendo console, because such a course of action will only increase the value of physical Nintendo software. This is kinda similar to how the video game industry doesn't invest money in a lot of genres while Nintendo does and as a result sees huge game sales. Basically, if there's only company that caters to a certain market, this one company can reap all the rewards.

We've seen lots of digital-only games get physical releases with printruns of only a few thousand copies because apparently even that low of a level it's already a profitable business. These cases are first and foremost more expensive collector's editions, but games can stay at the regular price once a publisher prints several tenthousands of copies. The big Nintendo titles need several million copies for launch week already. In short, the profitability of physical copies on their own shouldn't be a concern. Your question whether the effort is worth it would us have to question if it's even worth it to continue making consoles, because hardware production and shipping has much bigger overhead than software. But of course it's worth it to make consoles when you look at the bottom line of Nintendo.

The thought process that Nintendo could improve their bottom line by taking away the physical option for games works only as long as one believes that Nintendo can do anything and get away with it. But when you look at the sales history, out of the big 3 Nintendo is the company who is most affected by going up against the customers' will. So the most probable scenario that is going to happen is that Nintendo will test the waters with an all-digital console SKU while concurrently offering an SKU that supports physical games. It would be a scenario in which all-digital had to prove its worth to a degree of outselling the physical SKU by a ratio of 10:1 or higher to justify the decision to go all-digital in the future, because otherwise there would be way too much money left on the table. The inclusion of a physical media drive costs in the range of $20-30 in production, so it isn't an expensive part in a console.

The thought process of digital vs. physical sounds a lot like 15 years ago when it was hardcore vs. casual games. How long would it take until Nintendo turns into a company that only makes cheap casual games and the like. None of this fearmongering ever became reality because the premise of mutually exclusive scenarios is inherently flawed when the two sides aren't mutually exclusive at all. So to conclude this post, what's the most profitable venture out of the following three options?

1. Offer only physical games.
2. Offer only digital games.
3. Offer both physical and digital games and let customers decide what suits them best on a case by case basis.

The best option is the one that caters to the biggest amount of customers. More consoles sold means more games sold, more add-on content sold, more subscriptions sold. That's an easy principle and also why physical games won't go away. Never forget that game collectors are all about physical games and among the most profitable customers due to how many games they buy. That's why so many indie games have gone physical.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

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Chicho said:
The_Liquid_Laser said:

I voted never.  Nintendo isn't going all digital.  There are too many customers in physical sales.  The "inevitable" all digital future has been talked about for so long now, that it's passe.  It's not coming.

People that say never usually end up wrong. 

Flight by machines heavier than air is unpractical and insignificant, if not utterly impossible.
— Simon Newcomb, 1902

People that say "inevitable" also usually end up wrong.

I am inevitable.
-Thanos



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Probably this decade, maybe the 2030s.

Even Nintendo encourages digital purchases, though of course they still have immense amounts of their software sold in physical copies.



Lifetime Sales Predictions 

Switch: 144 million (was 73, then 96, then 113 million, then 125 million)

PS5: 105 million Xbox Series S/X: 60 million

PS4: 120 mil (was 100 then 130 million, then 122 million) Xbox One: 51 mil (was 50 then 55 mil)

3DS: 75.5 mil (was 73, then 77 million)

"Let go your earthly tether, enter the void, empty and become wind." - Guru Laghima

Theres no reason to have physical next generation, even a lot of physical games now have huge downloads. Microsoft just launched on xbox it's cloud gaming, games like Halo 5 and MCC which have over 100GB download are no longer need to be downloaded to play as it runs off the the cloud beta service.



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brute said:

I would also say that "gifting" a game is much different than gifting music or movies which will continue to drive physical sales.

When parents buy their kids games for their birthdays or holidays or whatever special event they tend to mostly buy physical, as it brings greater joy when a kid opens the package and sees the game case there.

And the whole switching discs to play a different game isnt as inconvenient with Switch as other consoles. Switch games barely have an install and switching the cards takes a few seconds at best.

True that's why they sell fortnite games in stores that just comes with a digital code.






Chicho said:
The_Liquid_Laser said:

I voted never.  Nintendo isn't going all digital.  There are too many customers in physical sales.  The "inevitable" all digital future has been talked about for so long now, that it's passe.  It's not coming.

People that say never usually end up wrong. 

Flight by machines heavier than air is unpractical and insignificant, if not utterly impossible.
— Simon Newcomb, 1902

There is just as much absolutism in statements like "thinking physical will still be a thing in 2060 is hilarious" and "the idea that physical media will even exist in 2060 is a crazy notion".  It's not much different from someone in 1960 being convinced that we'd all have flying cars or jet packs by now.

Newcomb's position is humorous to look back on in hindsight for sure.  However, flight didn't completely eradicate other methods of travel (automobile, locomotive, sail, etc), so it doesn't really apply here.  Meanwhile, print media is supposed to be dead, but even though E-readers have been around for a while, books still exist and achieve million sellers.  

I don't deny the rise of digital media, but I also don't think physical media will completely disappear either.  Projects like the Intellivision Amico are a worrisome prospect of the future.  I can still insert one of my grandfather's Intellivision cartridges into a Mattel Intellivision from 1979 and play it 42 years later.  But if the all digital Amico from Intellivision Entertainment goes bust, will there be a server running to download its games from even 5 years from now?  The Ouya, which has been rendered a $40-$50 doorstop on ebay tells me the answer to that question is no.