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Microtransactions and digital sales are dominating game developers' profits

19/01/2015 by Sharon Shahzad


Game developers made a majority of their profits from digital sales and microtransactions in 2014, according to a survey of more than 2,000 North American developers released Thursday, and off-the-shelf game sales aren't pulling the weight they once were.

The data were released as part the annual Game Developers Conference "State of the Industry" survey, which was sent out to registered attendees of GDC over the last two months.

Some of the most illuminating data regarded where developers were making their money. Twenty-nine percent of developers said their a majority of their profits came from direct sales to consumers or digital sales, which includes sales over services like the App Store, the Google Play Store or Steam. The next largest segment — 21% — said their profits were coming from microtransactions and in-app purchases.

Just 13% of the respondents said their profits were the result of physical retail sales, showing just how big the shift to on-demand downloads for even big releases is growing. Finally, 19% reported they either hadn't made significant profit in 2014 or didn't know where their money was coming from.

While these respondents can't account for the entire game industry, the digital segmentation is growing. Total spending on digital games in the United States reached $1.2 billion in December, according to digital analyst group SuperData Research, and digital sales on PlayStation 4 and Xbox One grew 10% year over year.

Speaking of the newer consoles, the developer survey revealed growing interest in making games for both platforms. About 26% and 22% of developers said their games would release on PlayStation 4 and Xbox One, respectively, up from 14 and 12% at the same time last year. These numbers don't imply developers' games were exclusive to either platform, as games are often developed for multiple platforms at once.

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