"As for some critics calling packaged NPD data 'irrelevant' well... the strong majority of full game sales still comes from packaged retail, and will be for some years to come," Piscatella commented.
"I've been looking at the interplay between digital and retail sales data for years now, and the data suggests to me that digital is more incremental than cannibalistic to full games sales -- meaning that I simply don't see digital and retail competing in a zero sum game for full game sales. Yes, more digital games are being purchased, and the overall share of digital is increasing, but that's not leading to direct offsetting declines in the retail space.
"The data suggests to me that digital is increasing the size of the overall pie, and that both retail and digital are vital parts of the new ecosystem, and will be for some time. We have data that suggests, for example, that millennials and Gen Z game buyers have the highest purchase incidence rates of packaged retail games, likely driven by the way young people use packaged retail games as a form of currency for purchasing new games later when they are sold or traded in. It's quirks in the video games market like this that will keep packaged retail in the forefront of full game sales for at least the short to mid-term future."
Digital now represents nearly three-quarters of the entire US games market, but a big chunk of that revenue comes from mobile and PC gaming, so it's not an indicator that console retail is failing, Piscatella stressed.
"I can't see (and have never seen) any evidence in the data that increases in Mobile and PC spending have had any direct negative correlative impact on console or physical retail," he said. "Spending on console is where any digital cannibalization of retail would occur, and the growth in full game digital spending has not been met with anywhere near a corresponding decrease in packaged spending at retail. Changes in retail spending correlate much more closely to changes in the number of packaged games that publishers are producing, and don't correlate at all with changes in digital spending.
More at GamesIndustry.