The Digital Landscape of the Video Games Market in 2024

The video games industry has been predominantly digital for some time. When considering all aspects, including downloads, microtransactions, and subscriptions across various platforms, the physical market represents a relatively small portion of the business. However, physical sales remain a crucial distribution method for new games. In 2023, 72.4 million video games were sold through physical retailers in Europe, with 42% of new games being sold in physical stores. But what about 2024? The data, while not comprehensive, indicates a significant shift towards digital sales for new games. For the first 40 weeks of 2024, 75% of new games were sold digitally, a 12% increase from the previous year. This shift is largely driven by increased digitization on PlayStation and Xbox. On PlayStation, physical sales of new games have dropped to under a third of the market, while on Xbox, only 19% of new games were sold physically. In contrast, the Nintendo Switch remains a predominantly physical platform, especially for third-party games. The cause of this shift can be attributed to the release schedule, with games like multiplayer shooters selling mostly digitally, while games like Astro Bot sell more physically. The release slate in 2023, including Hogwarts Legacy and single-player narrative games, was more physical-friendly. In 2024, the biggest releases have leaned more towards digital sales. However, looking at annual releases like sports games, there is a natural movement towards digital sales, with some titles seeing a 1% to 2% increase in digital sales. Ultimately, the decision to release a game physically or digitally depends on the game, platform, audience, and territory. With 32 million physical games sold across Europe in the first nine months of the year, the physical market remains a viable opportunity for game developers and publishers.