Physical video games are far from dead in South Africa

Despite a rise in digital software sales, physical disc copies will still be important in South Africa for several years, the local distributors of Xbox and PlayStation have told MyBroadband.

With many people confined to their homes during widespread COVID-19 lockdowns, online platforms became one of the most important channels for game and software sales.

Digital storefronts make it easy to purchase titles straight from home, download them, and start playing within a few minutes or hours, as opposed to having to go out and visit a shop to buy a physical disc.

While COVID-19 accelerated this trend, it has been a long time coming, with global digital game sales seeing tremendous growth in the last 10 years.

According to data from Statista, this was particularly evident in the US, one of the biggest gaming markets.

In 2009, physical games accounted for 80% of the sales in the US, while digital-only stood at 20%.

Digital sales saw big increases in subsequent years, however, and finally surpassed physical copies by 2013.

By 2018, digital sales were completely dominating, accounting for 83% of sales.

The graph below shows how US computer and video game sales changed between 2009 and 2018.

US game sales

South Africa’s trends

The situation in South Africa is slightly different from first world countries like the US, however.

Prima Interactive are the distributors of Xbox consoles and games in South Africa, while Gamefinity does the same for PlayStation products.

Prima Interactive CEO Ian Hepplewhite has said that digital sales have also grown in South Africa over the last four years, but Gamefinity CEO Mario dos Santos claimed that physical software sales remained fairly consistent over the last few years.

Hepplewhite said PC games have shifted almost entirely to digital sales.

“Physical software sales have also been impacted by the online Battle Royale titles like PUBG, Fortnite and Apex Legends,” he added.

According to Hepplewhite, new console releases on Xbox also performed better on digital platforms.

However, Dos Santos claimed that even on its new release software, the greater share of sales came from the physical versions.

Both agreed that digital sales dropped off sharply after initial release, which meant that they accounted for a very low share of catalogue game sales.

“Retailers have picked up some additional sales from digital in the form of gift card sales,” Hepplewhite added.

“Many gamers do not want to load their credit card details onto the digital stores. They opt to buy gift cards and use them to buy from these digital stores.”

Connectivity and game sizes

Hepplewhite and Dos Santos said that challenges in broadband connectivity remained one of the biggest reasons physical game sales would remain relevant.

“New release sales will be impacted faster, but the cost of connectivity will enable catalogue sales and trade-ins to still drive the budget market,” Hepplewhite explained.

“We believe that the digital customer is the gamer who is on the bleeding edge of technology – the early adopter. Most likely they have an unlimited high-speed fibre connection, and are probably paying around R1,000 per month for this service,” Hepplewhite said.

“Gaming resolution went from SD to HD to Full HD to 4K. As the resolution improves, the file size grows. A game like Cyberpunk releasing in December is a 70GB download,” Hepplewhite said.

Not all customers have unlimited bandwidth, making a physical disc purchase more feasible, particularly for the mass market, Hepplewhite said.

Dos Santos noted that growing file sizes also made physical copies more attractive from a storage perspective.

“As the gaming community continues to grow it will be imperative that we continue supporting the demand with physical software sales. There is still a large percentage of gamers who prefer getting the physical versions,” Dos Santos said.

Remaining time

BT Games director Launa Bagnall previously told MyBroadband she believed physical game retailers still had at least another two to three years left in South Africa.

Hepplewhite said that this timeline was a little aggressive and that Prima Interactive expected another 5 years of physical software sales.

“That will mean the market will still be worth over R400 million at retail,” he noted.

“Physical games are good for retail. They drive customers into stores as entertainment is fresh. Physical also gives publishers the opportunity to have retail displays which showcases the new titles,” Hepplewhite maintained.

“New digital options like Game Pass and Project X cloud will definitely drive the digital share. But we have seen that this has made people play more games. So we believe that like mobile, this will grow the total market,” Hepplewhite said.

Dos Santos agreed and said that although the trend in the shift to digital, particularly on new releases, will continue, the need for physical software will remain as gaming becomes more pervasive.

“We work closely with the principals and publishers that we represent and can confidently share that there is no intent in the short or medium terms to migrate to digital only on key brands and properties,” Dos Santos said.

Now read: The best South African ISPs for gamers

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Physical video games are far from dead in South Africa