Microsoft: Digital Games Won’t Kill Off Retail

Microsoft’s Xbox Live Product Manager Pav Bhardwaj recently told OXM that he does not believe that the growing prevalence of digital games will have any appreciable impact on sales of physical, retail games, and that he believes the two will co-exist.

“I don’t genuinely believe that there will be more digital and less physical product,” Bhardwaj told OXM interview. “I actually think the entire market will grow. I think there’s room for both – there’s a certain type of customer who really wants a physical product, because who doesn’t want those steelbook limited editions? I think everybody wants those. And there’s a certain kind of customer who will also want the digital.

“So I think there’s room for both, and it’s our job to grow with the entire industry going forward, and offer people who want a certain product a certain way, that particular product in that way, and for people who want a physical product, to carry on buying that.”

He also proceeded to add that the demographics of Xbox Live were changing- in general, it was an older audience now than it had been ten years ago, and that this as much as technological change would shape buyer preferences.

“I can’t really talk numbers or actual detail, but we actually are seeing the entire breadth of the Xbox customer base growing. It kind of ranges from that young customer all the way up – we’re seeing more families involved, core gamers are growing up and having kids, who are now enjoying the Xbox 360.

“So it’s really moving on with the customers we had originally, they’re carrying on – I think they’re also going to buy the Xbox One, and keep the Xbox 360 maybe in a bedroom somewhere. We’re just seeing it expand.”

Whereas I am not following him on the age/preference correlation, I do think he is spot on with his belief that retail is going nowhere, in spite of the growing importance of digital games. The gaming industry has this almost binary view of things, where only one or the other can survive, and what does not is almost certainly ‘doomed,’ but retail game sales will continue to survive just fine, in spite of digital game sales.