Traditional PC gaming is in decline, but it’s still way ahead of console games in adopting digital distribution.

The NPD Group has declared that PC games, in the first half of 2010, were more commonly downloaded than purchased on disc. Packaged media still collect more revenue, because of higher average selling prices, but digital downloads account for more sales. (For what it’s worth, some publishers have questioned NPD’s numbers, which are based on surveys and don’t include every retailer, but downloads are growing at any rate.)

PC games enjoy a healthy digital distribution market. Gamers have their pick of online retailers, and can download new releases on the day they become available, or earlier; Blizzard let players download StarCraft 2 ahead of time, needing only to activate the game the minute it went live. Old games continue to live on through these services, and are sometimes available for next to nothing. For example, Steam sold the classic Deus Ex for $2.50 to mark the game’s 10th anniversary.

I don’t have numbers for digital distribution on consoles, but the comparison wouldn’t be fair. Downloadable console games are in their infancy, with limited selections that don’t nearly match what’s available on store shelves. Why are downloads still such a small part of console gaming? Let’s count the ways.

Used games: The market for previously-played console games thrives, despite bitter gripes from game publishers, and counter-measures like fees for online multiplayer in used copies. Retailers like GameStop don’t deal in used PC games, so consumers concede nothing by downloading.

Closed platforms: As Microsoft, Nintendo and Sony dip their toes in digital distribution, they keep a firm grasp on sales. There’s no third-party store through which you can download games for Xbox Live Arcade or WiiWare. I don’t expect console makers relinquish control over their platforms, but the absence of competition makes the market less hospitable for consumers.

Storage limitations: The original Xbox 360 and Playstation 3 included 20 GB hard drives, and the Wii has a mere 512 MB of internal flash memory. All three console makers have pushed for more storage, either with bigger hard drives or external storage solutions, but it’ll be another console generation until downloads are practical for all owners, whether they’re early or late adopters.

Platform restrictions: When you download a game to the Xbox 360 or Playstation 3, there’s no guarantee that it’ll work on whatever consoles Microsoft and Sony launch next. Nintendo has even confirmed that its game downloads are tied to the console, not the user. PC game downloads, however, will run on any PC, and are typically tied to a single user who is free to upgrade machines at will. Unless console makers address this issue, building a digital console game library remains a risky investment.

 
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