Downloaded Game Sales Surge as Demand for Packaged Titles Fall

Sales of digitally-downloaded video games are surging this year as cash-strapped gamers buy fewer new titles from retailers in favor of cheaper games that may be purchased online, NPD Group said in a study released Monday.

Players downloaded 11.2 million personal-computer games from the Internet during the first six months of the year, up 37% from the 8.2 million purchased for the year-earlier period, according to NPD Group. Steamgames.com was the largest so-called frontline digital retailer, while Bigfishgames.com sold the most casual-gaming titles online, NPD Group said.

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The numbers contrast with sales of pricier packaged games purchased from retailers such as GameStop and Best Buy. NPD said earlier this month that U.S. video game sales had their worst August in four years, with software revenue dropping 14%. Through August, hardware and software games revenue is down 8% from a year earlier.

Meanwhile, almost 57 million people have played a game on a social network within the past three months, according to NPD.

"The overall decline of PC games when combining sales via both digital downloads and physical retail sales is impacted by the expansion of social network gaming as well as the continued expansion of free game options," NPD Group industry analyst Anita Frazier said in today's statement.