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Digital Games Revenue Continues Post-Holiday Slide, but Up Since Last Year

Down 10 percent since the holiday quarter, up 9 percent since March 2013.

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U.S. digital games revenue in the first quarter of 2014 dropped 10 percent versus the holiday quarter, but is up year over year, according to a new report out today from research firm SuperData.

Continuing the trend of recent months, revenue from downloadable content on PCs and consoles and free-to-play games on social, mobile and online platforms increased in March, while paid subscription revenue from MMOs like World of Warcraft fell year over year.

Overall, digital games grossed about $936 million in the U.S. last month. Added to the totals from January and February, that’s $2.92 billion in Q1 vs. $3.26 billion in Q4 last year. In March 2013, revenue totaled about $857 million.

SuperData said the Xbox and Windows exclusive blockbuster Titanfall, released in the middle of March, led the month in “boxed” game revenue, but we won’t get the full story there until the NPD Group releases its retail hardware and software numbers for March later this month. Industry watchers have been expecting the new EA shooter to be a mega-hit that would reinvigorate the Xbox One. Sales of Microsoft’s new console, while decent, have trailed behind Sony’s PlayStation 4, so the impact of a long-hyped exclusive will be the console trend to watch.

On the mobile and social side, SuperData estimated that average conversion rates for paying users in free-to-play games has increased from 1.9 percent six months ago to 2.3 percent in March. However, its researchers said Zynga is “starting to fall behind,” reporting a 1.7 percent conversion rate in its last quarterly earnings report in January. Zynga is scheduled to report its Q1 earnings next Wednesday.

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