Apparently DLC Makes As Much Money As Used Game Sales, A Report Says
The used games debate has sparked up once again since rumours have been flying around about next generation consoles potentially blocking this off, specifically since the Xbox One event.
Personally, while I have many of my own opinions on the matter, and we could all debate about it for hours on end, I simply stand by the belief that publishers will always grossly exaggerate the effects of anything they perceive as negative. Back in the day it was how game rentals were the spawn of evil, and then it became all about piracy early on in this generation, and how everything had to have DRM because piracy would be the death of gaming. Now it’s used games sales.
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What will be the next thing publishers blame for financial failures? Will they ever simply blame their own incompetence and bad business decisions? Doubtful.
However, today we have a very interesting story on our hands. Apparently, and totally unsurprisingly to me, the used games market doesn’t make as much money as publishers would have us believe.
According to publishers, used games is the reason why we can’t have nice things in gaming. And stuff. However, realistically speaking, corporate-blind individuals are pretty wrong about where the money goes in the North American gaming market, reports would suggest.
The NPD revealed that the used game market dipped by 17.1% in 2012, which is certainly no joke. But why is that? Well, apparently the evil and sinister used games market is declining because more people are buying digital content. Digital content is rising, and went up by 33% in 2012 last year. So digital content is up 16% over used game sales.
Furthermore, GameStop, the used games giant, reported $1.59 billion in used game software revenue for the year 2011, and they more recently reported $2.4 billion in 2012, for total pre-owned sales, which includes both hardware and software.
However, downloadable content, in all its forms both good and bad, is selling really well.
Overall, there’s been a 33.9% rise in revenue in 2012 over 2011, where EEDAR forcasted that it would surge past the $1 billion mark in 2012, and digital software and DLC sales totaled $2.22 billion in revenue. Used games, on the other hand, saw a 17.1% decline.
For some extra perspective on the matter, Electronic Arts’ digital revenue has increased by 45% over the last year, a total of $1.66 billion in 2012, as their fiscal report for 2013 reveals.
Which means, EA made $70 million more in digital game revenue in 2012 than GameStop made with used game sales in 2011.
To make it a bit more clear, GameStop’s used games retail hardware and software market combined made up for $2.4 billion in revenue, whereas digital content sales trail by $200 million, sitting at $2.2 billion. If things keep going like this, most likely fiscal 2014 results will show DLC beating out used games software sales on its own. And if this keeps up, used game revenue may keep going down.
Remember also that next-generation consoles won’t have backwards compatibility so those who make the complete jump to Xbox One or PS4 won’t be buying any used games from this generation. Only those who hold onto their consoles may still be invested in the market.
For PS4, we’ll have to see if the Gaikai service comes through.
In short. The used games market is seeing a decline while DLC and digital is rising steadily. Publishers exaggerate how bad the used games market affects them. Although that shouldn’t surprise you.