Assessing the Digital Landscape of the Video Games Market in 2024

The video games industry has become predominantly digital over time. When considering all aspects, including downloads, microtransactions, and subscriptions across various platforms, the physical market constitutes a relatively small portion of the overall business. However, in the context of brand new video game sales, physical distribution remains a crucial method. According to data from 2023, 72.4 million video games were sold through physical retailers in Europe, with 42% of new games sold that year being purchased in physical stores. But what changes have occurred in 2024? The available data, although comprehensive, has its limitations, excluding certain retailers and smaller European countries, as well as self-published titles and some major publishers like Nintendo. With these caveats in mind, the analysis reveals a significant shift towards digital sales for new games in 2024, with 75% of new games sold digitally across Europe in the first 40 weeks, representing a 12 percentage point increase from the previous year. This shift is notably driven by increased digitization on PlayStation and Xbox platforms. For instance, new PS5 games sold via physical retail dropped from 41% in 2023 to 32% in 2024, while Xbox Series S and X games saw a decrease from 26% to 19% in physical sales. In contrast, the Nintendo Switch, for which data is limited due to Nintendo's policy on sharing digital sales, shows a different trend, with 65% of new third-party games sold physically in the first 40 weeks of 2024. The cause of this digital shift can be attributed to the release schedule, with certain types of games, such as multiplayer titles, leaning more towards digital sales. The absence of blockbuster games like Hogwarts Legacy in 2024, which performed well in physical sales, also contributes to the observed shift. While there is a natural movement towards digital, analyzing annual releases like sports games indicates a more modest increase in digital sales. Ultimately, the decision for game developers and publishers to opt for physical releases depends on the game's genre, target platform, audience, and territory. Despite the shift towards digital, with 32 million physical games sold across Europe in the first nine months of the year, the physical market remains a viable opportunity for the games industry.