Digital growth slows to 5% in September - Superdata

After a summer packed with double-digit growth in digital revenues, the market has cooled off somewhat with the arrival of fall. According to Superdata's monthly worldwide digital revenue report, September saw the industry bring in $6.2 billion for the month, up 5% year-over-year.

The two areas of the industry that kept up the summer's pace of growth were mobile and pay-to-play MMO. Pokemon Go helped push the mobile market up 11% to $3 billion in revenue, while the launch of World of Warcraft: Legion powered a 12% surge in the pay-to-play MMO scene, which brought in a total of $267.4 million. Free-to-play MMOs were also up 6% percent to $1.5 billion, but other sectors posted significant contractions.

The social and PC markets were down 4% and 6%, respectively, while the console market dropped 14% year-over-year to $493 million. That dropoff came despite a successful launch for the Destiny: Rise of Iron expansion, which pushed the series' digital revenues for September from $7.2 million in 2015 to $59.1 million in 2016.

Superdata CEO Joost van Dreunen said the ongoing success companies like Activision have had with downloadable content strategies is exacerbating difficult conditions in the already hit-driven console market.

"The... worldwide console market is already a competitive battleground for major AAA publishers, but the growing number of legacy franchises with large bundles of additional content released between sequels will make the platform even more competitive and inhospitable for newcomers," van Dreunen said. "Franchises like Destiny and Call of Duty can not only charge a premium upfront price, but continue to take the lion's share of console spending for months or even years."

For anyone thinking the PlayStation VR might power an October rebound in the console market, van Dreunen had a mixed assessment of the system's early performance.

"Sony hit the sweet-spot with consumers in terms of pricing, hardware requirements and performance," van Dreunen said. "While not as powerful as the HTC Vive or Oculus Rift, PSVR is nearly half the price and does not require a high-end PC. On the other hand, it significantly outperforms mobile rival Samsung Gear since it plugs into the PlayStation 4. Although PSVR hardware itself was well-received by critics and consumers, its bundled software failed to impress. Sony is committed to bringing AAA titles to its VR platform over next year but PSVR is ultimately facing the same chicken-and-egg problem as the Vive and Rift. Top-notch virtual reality games need to be built specifically with VR in mind, but many AAA publishers are unwilling to invest in titles before the hardware becomes more popular with consumers."