Epic Games Store Launch Hurt PC Spending, According to NPD
Epic Games Store is contributing to PC digital sales decline across all platforms (including Steam), according to NPD Analyst Mat Piscatella.
Let no one say that competition always builds a healthy marketplace. According to the leading game sales expert Mat Piscatella, the introduction of Epic Games Store into the PC gaming marketplace led to lower overall consumer spending on PC content across every distribution platform. While the notion of multiple software platforms like Steam and Epic Games Store might have been sold to gamers on driving both innovation and competition among markets, new reports may be indicating that it is only driving some consumers away.
News comes from Mat Piscatella, a recurring industry analyst and the dedicated gaming expert within the NPD group. Quoting a report from both NPD and the Electronic Software Association (ESA), it was discovered that while software as a whole generated 2% more revenue in 2019, there were declines in spending for PC digital content sales when comparing year over year.
The great PC distribution platform wars of 2019 did not do consumer spending on PC content any favors btw. Priorities of enhancing consumer experience & choice and minimizing confusion were all deemphasized in 2019, contributing to lower overall consumer spend on PC content.
— Mat Piscatella (@MatPiscatella) January 23, 2020
Why it matters: the dedicated PC gaming community has had a pretty significant backlash to Epic Games Store’s inclusion into the PC gaming scene. The community, which has seen significant growth over the generation, has been largely propelled by the ease and unified nature of Steam. While there were obviously other platforms in the PC marketplace like GreenManGaming or GOG Galaxy, there was a near console-like ubiquity to the Steam marketplace that added a marketable certainty to PC gaming.
Epic Games Store entered the scene fairly successfully, with competitive rates for developers and publishers who were willing to give them exclusives. While this benefit mostly passed along to the developers and publishers, Epic Games founder made claims that diversifying the marketplace and creating competition to the (often draconian) policies of Valve would both drive consumer spending and make for better distribution platforms.
This report from NPD is the first real inclination that either the policy at large or the gaming reaction to it isn’t working. Instead of dividing Steam’s established base to create competition, it appears that some are simply stepping back from the scene entirely — choosing instead to purchase games on consoles or roll back their gaming budget entirely. Piscatella agrees, noting that the consumer experience and choice were negatively impacted in 2019, while marketing confusion created new problems for the ecosystem at large.
For what it’s worth, this may be a necessary side effect to adding a new platform to the console — a speedbump ahead of a successful 2020. However, it’s pretty fascinating that digital PC sales were the only tracked product other than physical console games to decline in 2019.
While the ecosystem at large suffers, Epic Games Store has been touting their own success — according to a recent report from them, they have netted 108 million PC customers and made over $680 million within their first year. Perhaps a clear indication that EGS is a thorn in Valve’s side, Steam has been implementing new additions to their platform as the development side works on new software — including the highly anticipated VR follow up to Half-Life.