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Digital distribution challenges titans of video game industry

  • Jun 06, 2012
  • By 
    Canadian Business

Like chain-retail record stores before it, video game retail’s days are numbered and its demise will come at the hands of the same killer: the Internet.

Digital distribution is steadily sweeping away the incumbent channel and delivering it to a clutch of online-based services and retailers like Steam, Amazon, GameFly and Origin. But that club is still absent the true behemoths of the video game industry in Microsoft, Sony and Nintendo. That may be about to change, whether anyone wants it to or not.

“We’re already seeing the beginning of that with some of the recent sales numbers that are out there,” says Julien Lavoie, director of public relations for the Entertainment Software Association of Canada. Data from ESAC show that as of February 2011, digital distribution accounted for 6% of sales by revenue—but 35% of sales by unit. In the much larger U.S. market, digital distribution accounts for 24% of sales, up from 20% in 2009. (NPD does not release unit sales figures for the U.S. market.)…

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