Important bit bolded? All the digital sales going up by a large amount doesn't surprise me (indies being pushed on consoles, DLC being ever more a requirement with games, etc) and here we see physical sales dropped 6% so shows a similar 'expected' figure - so nothing to fear here.
Yes for EA, the drops are smaller. For Activision-Blizzard the drop in physical game sales from 2014 to 2015 was 14.2% and the drop from 2015 to 2016 was 23.3%. That is also despite console revenues increasing.
FY ending 2014 - 2.150 billion USD
FY ending 2015 - 2.391 billion USD
FY ending 2016 - 2.453 billion USD
Compared to the numbers in my previous post if we make an assumption that physical sales are mostly console (there's still a non-negligible number of physical sales for PC, but it's pretty small) you can get an idea of how many people have moved to digital on console WRT to Activision-Blizzard titles.
NOTE - the following isn't the percentage of physical sales revenue on console, only the percentage of physical sales revenue (which include a small number of PC sales and only include full game sales) in relation to console sales (which would include things like DLC).
FY ending 2014 - 102.9%
FY ending 2015 - 75.5%
FY ending 2016 - 56.5%
Depending on how prevalent you think PC game sales are and how prevalent DLC sales on console are, will alter how reflective those numbers might be for console physical sales. If I were to take a guess, I'd say that console DLC sales are likely higher than PC physical sales at the current time. If that is true then console physical sales for Activision-Blizzard are likely closer to 50% of full game sales.
One thing that is interesting is that back in 2012, EA made a statement to the press and investors that they intended to move to being fully 100% digital. Consumer backlash to XBO's reveal likely put a kink in that. Also likely explains to a certain degree, where the impetus for Microsoft's decision for XBO focusing more on digital prior to the consumer backlash. EA was likely pushing Microsoft quite hard to go in that direction. Other publishers were probably hoping it would work out as well.
Anyway, fast forward to the present and Activision-Blizzard are much further along in transitioning to being fully digital.
[edit] Forgot to include another little side note. Physical sales revenue accounts for just 22.2% of all game revenue for Activision-Blizzard. While that is lower than the 26% that NPD reports for the US, it's closer than EA's 41.5%. Which means that the rest of the industry is likely closer to 26% making EA a rather large outlier.
I never understood why digital was so expensive, they do eventually drop though so like others I tend to go physical then upgrade at a later date if I intend to keep the game. Often I will buy a special edition and sell just the disk on.
Reliance on retailers and keeping retailers happy mean that digital prices have to match retail MSRP at launch. On console this also means that while retailers can discount physical pricing on a retailer by retailer basis, console manufacturer's cannot. However, on the PC side of things, while there is pressure on publishers to keep PC prices the same as console prices and thus retail prices, they will often discount pre-order and launch prices (for 1 week in general) before setting back to matching console retail pricing. Retailers don't make much of a fuss over that as retail physical for PC is negligible and most retailers instead sell Steam gift cards or sell Steam game codes.
Regards,
SB
