Given the recent dust up over Battlefield 3 being limited exclusively to EA’s own Origin download and distribution service, I felt we should take a quick look at the rise of the digital download market. As an industry, digital game distribution has grown 17% in the last year according to our New Media Measure data. More gamers are forsaking retail stores for the convenience of downloading games right from their console or PC. Speaking from personal experience, the last 4-5 games I have purchased have all been acquired digitally. If gaming will no longer come in a case or a box with a disc, and instead through the internet, what will be the most utilized sources for acquiring games?
Looking at the data, console downloads are highly popular if for no other reason than console gamers being more prevalent than PC gamers. Full AAA title downloads for console games are still limited in availability and seem to lag initial release by up to 6 months, but Add-on and downloadable content has become a multi-million dollar industry for digital sales.
Big Fish Games and Pogo are the representatives from the casual gaming segment and a surprising reminder of just how relevant and financially potent casual gaming actually is. The fact that downloads have such a presence considering that most are played in-browser is a testament to the popularity of casual gaming. The acquisition of Popcap games by EA for $750M is further evidence of that.
A big battle seems to be shaping up between Steam and EA’s Origin service, as the two companies have been sniping at each other for quite some time. After years of trial and error, Steam has become the king of digital PC gaming. Ingratiating itself to gamers with high quality games and absurd bi-annual sales, Steam is the PC paragon. However, EA’s Origin service may soon take a chunk of the PC download market. After many incarnations of similar services, EA rebranded its former download service to more directly compete with Steam.
In its New Media Measure debut, Origin pulled a solid 4%, and I expect this number to rise significantly in the coming year. As far as distribution services go, I believe gamers will follow the games-whether Steam, Origin, or elsewhere. The power of the Battlefield 3 brand should plant a flag for Origin and the newest Star Wars MMO, The Old Republic, is garnering a lot of buzz as well. By making these big brand titles cornerstones for Origin, EA has a solid 1-2 punch to establish its’ service as a major competitor.
Let’s not forget that EA is copying the exact formula Valve used many years ago with to launch Steam. Limiting gamers to their proprietary system and capitalizing on demand for Half Life 2, Valve was able to forge an estimated near-billion dollar dollar digital distribution platform. The strength of the EA brand and the excitement for upcoming blockbusters gives Origin an excellent platform to start from in trying to capture market from Steam.