Xsolla - The Declining Retail Market

The Xsolla Blog has another interesting article this week about the declining retail market, and why digital is superior. Here is a small sample of the post.

Wrapping this post up we can tie all the advantages to one major concept: Giving the developer control over how their game is sold. While you are still dealing with a storefront like Steam, you have far greater control over your game compared to the retail space.

There is no worry about a store putting your game on the back aisle or maintaining inventory when it’s all handled digitally. This has also made it a lot easier for developers to sell games on their own sites which weren’t possible or viable five+ years ago.

Digital stores are far more open to games that aren’t aimed at the mainstream. Titles like Hotline Miami or Binding of Isaac would not have been accepted in retail stores due to their strong content but were welcomed on Steam.



The rise of the digital market has been one of the biggest shifts in the Game Industry. And Stardock is correct about how it is taking over the retail market. It will be interesting to see just how far things go by the end of the decade and what capacity the retail market will be at that point.

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As a counter-point when games needed to be kept in inventory, it's price was actually based on the market and games that weren't getting sold would drop in price to be in line with what the consumers were willing to pay.

Now there are some artificial sales periods but sales used to be a thing so the stores could clear out their inventory, there was an economical need to clear the inventory but with digital there is no inventory (there just needs to be one copy of the digital game on the Steam servers). Sales used to be an economical thing, now it's just marketing.

Even developers have been complaining about devaluing of their games due to Steam Deep Discounts but the fact is the games have been devalued because they have no economical value anymore (on the Supply side) because there never will be a shortage.

The devaluation is also apparent when most Gamers have more games on steam than they are ever going to play.

It's true that Brick store bought games have also been devalued, but that's because you still need Steam, even if you buy from a store.

There is no actual economical value (supply side) to the 1 copy of a game Steam stores on it's system, and that's why it's so easy for total crap to fill the Steam database. After all, they just need one copy of a game, there's one copy of Skyrim (which was sold a few million times), but also just one copy of Air Control and there doesn't seem to be any quality control at all. And Steam doesn't have to make any economical decision on whether to stock up on Skyrim of Air Control copies.

In the end, it's all bits & bytes.
And without any physical medium, games will be forgotten faster.
Especially if they aren't playable without their bound "serviced" after 30-40 years anymore.