Digital Sales Hit Record Numbers For Gaming Consoles Due To COVID-19

The prediction made long ago that sales for digital games would eventually exceed those of physical games. It only took a pandemic to finally turn it into reality.

In the first full quarter of the lockdown after the COVID-19 pandemic spread worldwide, video gaming’s major publishers touted huge surges in their installation bases and online sales for both full-copy games as well as microtransactions.

Daniel Ahmad, a senior analyst for the games research firm Niko Partners, pointed out on August 3 that video game fans, stuck at home, with the ability to make one-click purchases for entertainment to pass time, essentially did so in amounts up to the price of a full game.

“The digital split at the beginning of the PS4/XB1 generation was approximately 5-10%,” Ahmad said in an email to Polygon. “We’ve seen this ratio grow by approximately 5 percentage points each year, and now it has become clear that we are past the 50% market.”

“It is why Microsoft has had confidence to launch a digital version of its Xbox One S console (in 2018) and why Sony will have a digital-only version of its PlayStation 5 console at launch,” Ahmad added.

When the PlayStation 5 and Xbox Series X launch this holiday season, these two next-gen consoles will be more equipped than their predecessors for an all-digital gaming experience. The numbers from several of the gaming industry’s publishers back up the digital surge during the pandemic.

In its July 30 call with investors, Electronic Arts reported that 52% of its full game sales, on consoles, came from online purchases over the preceding 12 months.

As the parent company of both 2K Games and Rockstar Games, Take-Two Interactive told investors on August 3 that 77% of current-generation console game sales were delivered online, which was up from the same quarter last year — and that was 75%.

Sony reported on August 4 that 74% of software unit sales for PlayStation 4 were digital for the preceding quarter, well above the 53% figure of the same quarter in 2019. That can clearly be attributed to new consumer behavior influenced by the pandemic.

The surge in digital sales, as huge as it was, surprisingly didn’t hurt sales of physical games so badly, however.

“What is notable is that packaged software,” among all publishers, Ahmad told Polygon, “despite making up a lower percentage of sales, did not decline and accounted for 23.7 million units this quarter, compared to 23.4 million last year. We agree that the pandemic has sped up the inevitable shift to digital, but this has not yet come at the expense of packaged software, which has held well.”

That may not be the case for long though. “As you’ve seen for many years now, as consumers buy media digitally, they tend not to go back to physical purchases because of the conveniences and the advantages of buying digital,” Daniel Alegre, Activision Blizzard’s chief operating officer, said in that company’s earnings call on August 4.

“Consumers have shown that they are OK with how digital works today and believe that the convenience of digital outweighs any negatives,” Ahmad said. He also stated that his firm believes packaged software will still be a key part at the beginning of the next console generation.