Research: Consoles Fast Becoming Top Digital Distribution Market

According to a new report by market research firm ABI Research, consoles are quickly becoming a top contributor to the digital distribution market, with microtransaction revenue expected to reach $833 million by 2011. The new research, done as part of ABI's “Console and Handheld Online Gaming” report, says that a fast growing part of consumer budgets are going toward fully digitally distributed content and games on consoles -- from addons, in-game items, and casual games to fully downloadable console games. ABI says that Microsoft's Xbox Live is currently the market leader -- unsurprising given its early launch into the arena -- between both its Live Arcade and newly formed and ever expanding video marketplace. It does see potential for upset, however, with the Wii's Virtual Console serving popular legacy content, and hasn't at all counted out Sony's PlayStation Network, expected to grow at a rapid rate. Apart from gaming content, ABI says that video and music downloads to consoles will also continue to be a major growing market, reaching annual sales of $1.1 billion by 2011. Said ABI research director Michael Wolf, “The market is evolving from one in which over 90% of software monetization occurs at time of game purchase through standard retail channels, to one where a significant portion will take place through digital distribution." He added, “All of the big-three console vendors are working closely with their publisher partners, both internal and third party, to push as much content through digital distribution as possible. In offering original titles and after-market content, publishers will be able grow the average revenue they receive for a single gaming title.”