Digital distribution, social networks and free-to-play model fuel PC game growth in 2009

By Erin Bell |

In spite of a worldwide recession the PC gaming industry grew 3% in 2009 thanks in large part to the growing popularity of digital distribution and the new monetization opportunities offered by social network sites and free-to-play games, according to the PC gaming Alliance (PCGA)’s 2009 Horizons Report.

The research study, which examines every part of the PC gaming industry worldwide including retail, online gaming, digital distribution, and online advertising, found that PC gaming software revenue was at $13.1 billion in 2009, up 3% from 2008.

According to PCGA President Randy Stude, the move to digital distribution and the growing popularity of online games have been two of the most notable PC gaming trends in recent years.

“In 2009 we saw North America and Europe experience a rapid uptake in purchasing virtual items,” Stude added.”This model is what drove growth in Asia and we think it is just starting to come to Western markets.”

The report also noted that free-to-play games and social network sites like Facebook continue to draw in thousands of new gamers that can be “progressively monetized” (through micro-transactions, virtual currency, ads, and other emerging monetization services).

Not all areas of PC gaming enjoyed growth in 2009, however. According to the report, high-end subscription games that charge a fee of $10 per month or more suffered from the lack of major new releases, and a decline in usage for some older products. The biggest downturn was in retail boxed sales of PC games, which now accounts for less than 20% of total revenue.

“In our surveys of PC gamers in North America and Europe we found that over 70% indicate they have bought a full game online.Furthermore, over 50% indicate that they have bought a virtual item,” said DFC Analyst David Cole.”This is very positive because, when done successfully, companies in Asia have found the digital distribution model to be significantly more profitable than the traditional retail boxed goods business.”

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