Activision Blizzard Says Shift Towards Digital Is “Real” and A “Good Thing”

Some aren’t happy about gaming’s inevitable digital future, but Activision Blizzard’s Spencer Neumann spoke to the transition during the company’s Q3 2017 earnings call. Neumann said that “shift to full game digital downloads” is “real,” and that it’s great for game companies since it brings them closer to their consumers. After all, they only have to click a button to redownload a game at any given time.

Before talking about the increase in digital sales, Activision Blizzard’s Spencer Neumann stressed that retail is still a major factor. “Retail is going to continue to be important for us on console for some time to come,” said Neumann (transcription via Seeking Alpha). “That said, this consumer trend that we’re seeing and the shift to full game digital downloads, it’s real, it’s a strong tailwind for our business, and it’s a good thing. That digital connection, it brings us closer to our consumer and it creates better economics. It’s roughly $10 of direct profit improvement and then there’s also indirect savings and margin benefit and even some working capital benefits.”

Neumann then went on to talk about Destiny 2‘s incredible digital sales rate, which was at over 50%.

I believe we mentioned last year that our historical digital mix was about 20% to 25% for Call of Duty and more in the 30% to 40% range for Destiny and Overwatch on console. And historically, we’ve been seeing that digital mix increase at about 5 points a year.

As you point out, with Destiny 2 digital at over 50% console sell-through so far, we believe we’re seeing some acceleration in that digital shift. And while that’s consumer-led move, I’d be remiss if I don’t point out just for a moment that our team put together some really compelling digital premium packages and drove a lot of credit for creating packages that clearly resonated with Destiny‘s community and delivered a lot of value.

While this will displease some, it’s clear that consumers have made a choice in what direction they’re interested in. It’ll be interesting to see how the digital marketplace continues to evolve as an increasing amount of players make the shift.

[Source: Seeking Alpha]