Paradox Gets 95% of Revenue from Digital Distribution

Last month Paradox Interactive CEO Fredrik Wester boldly predicted that the next generation of console hardware would "probably be the last." Now, Wester has clarified those remarks, shedding light on his company's amazing success with digital distribution in the process.

In explaining the reasoning behind his prediction, Wester shared this surprising tidbit: "My own experience of digital distribution is that we made 1.5 percent of our revenue from digital distribution in 2006, while the digital number in 2011 was over 95%."

While Wester acknowledges that Paradox, a PC-only publisher, has made an uncommonly strong push into digital distribution, he feels the primary factor in that explosive growth is that the average consumer greatly prefers the convenience of downloadable games.

"My own personal view is that one of the major reasons that piracy ran rampant in the early 2000’s was the inherent conservatism on big portions of the music industry that refused to look at new distribution models. Many companies say customers are conservative and do not like change — my experience is quite the opposite. Companies are typically conservative and like the old ways of working and making money, basically because it is more convenient for them, while customers always strive for the easiest and most convenient way to consume their products."

While Wester's explanation should ring true with most gamers — I know I'm certainly more inclined to buy a game through Steam than to put on pants and head to the store — his larger points about the future of the industry are much less certain.