Report points to downloads as gaming's saviour

A new report on the global gaming market predicts bumper growth, and comes with a message that won't be a surprise to PC gamers: digital distribution is going to surpass retail sales as soon as 2013.

In the report from market analyst DFC Intelligence, it is predicted that the global market for computer and video games will reach a whopping £50 billion by 2016, up from the £40 billion the market generated in 2010. While that's good news for an industry beset by studio closures, it comes with a note of warning for retailers: your days are numbered.

"On a global basis it looks like retail delivery of physical software peaked in 2008," claims DFC Intelligence analyst David Cole regarding the report. "We expect a slow, steady decline for physical game sales, with a steady increase for online delivery of games and new business models such as subscriptions and virtual item sales."

That's not a surprising message for anyone who's watched the success of digital distribution services like Valve's popular Steam. The lure of getting a game right-gosh-darn-now coupled with some impressive offers on older titles have people falling over themselves to buy games online, while boxed copies - which often come with onerous digital restriction management technology that equals or surpasses anything the downloadable copy features, requiring the user to be connected to the Internet in order to play - are dwindling rapidly.

While much of this decline can be attributed to the convenience factor - who wants to schlep down to a bricks-and-mortar retailer to grab a physical product when Steam will preload it onto your system in time for you get playing the instant the launch date arrives - it can also be traced back to the decline in quality of boxed titles.

Comparing the launch of classic space sim Frontier: Elite II and recently-launched stealth FPS/RPG hybrid Deus Ex: Human Revolution, it's clear to see that there's been a reduction in the effort placed into the boxed edition: while Frontier comes jam-packed with extras including a large full-colour star chart, a book of short stories set in the game's universe, and an extra-thick manual masquerading as a spaceship owner's guide, Deus Ex comes with little more than the disc and a thin quick-start guide pretending to be a manual.

While some titles do come with a selection of extras - including maps, figurines, and in one case a fully-working pair of night-vision goggles - these are usually reserved for the extra-expensive collectors' editions. For those buying the standard versions, there's usually little to lose out on by eschewing the physical copy in favour of the virtual.

With many more publishers looking to a digital distribution model - either by signing up to existing services like Steam or by launching their own - things are starting to look grim for the traditional gaming shop.