So I decided to post a couple of graphs here which I posted on NeoGAF last month. This is a breakdown of spend on video games across Ubisoft, Activision Blizzard and EA’s divisions and showing where each organisation generates its most revenue. The key thing to take away is that it’s showing the decline of last generation console platforms but ultimately still shows that for big AAA publishers the console platforms are seeing more spend from consumers over PC and mobile as adoption of next generation consoles takes place. Activision Blizzard have seen healthy spend from consumers on PC/Online gaming due to World of Warcraft and other subscription based/f2p PC games.
EA and Ubisoft are seeing more spend on PlayStation 4 and Xbox One than any other of the individual platforms whilst Activision Blizzard still sees more spend from PC.
Mobile continues to grow for all 3 publishers and now represents a healthy part of the business. This has fuelled digital sales growth among all three companies with EA now seeing 51% of total revenue generated from digital sales over the past 12 months. Digital distribution was the main area of growth for Ubisoft as well and Activision blizzard
According to Activision Blizzard internal estimates, overall industry digital gaming revenues for the six months ended June 30, 2015 increased by approximately 19% as compared to the same period in 2014. The primary drivers of the increase in digital gaming revenues were increases in micro-transactions and consumer purchases of full games via digital channels. Digital revenues are an important part of Activision Blizzard’s business, and they continue to focus on and develop products, such as downloadable content, that can be delivered via digital online channels. Digital sales represented 50% of total revenue for the six months ended June 30, 2015.
Further, while the new console cycle has started strongly and demand for next-generation games was higher than expected, the retail demand for prior-generation games declined at a faster pace than the growth of retail sales for next-generation titles, resulting in the overall decline in sales in the retail distribution channels, down 7% in North America & Europe YOY. According to The NPD Group and GfK Chart-Track, retail sales from prior-generation platform games declined by 55% for the six months ended June 30, 2015, as compared to the same period in 2014. However, the increase in digitally distributed games, including full-game downloads, add-on content, and free-to-play games, has offset the negative trends in the retail distribution channels.
It’s been pretty clear for a while now that digital is going to play a huge part in this generation and the next generation of consoles. What I expect to happen is for Gen 7 spend to decline faster and faster and for Gen 8 spend to still account for the majority and for a lot of that spend on gen 8 games to come via digital downloads over physical purchases.
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