Earnings by New Zealand's video game industry leapt to a record high of almost $350 million last year.
The increase was mostly due to a surge in digital sales, which increased by 34 percent to more than $200 million.
The figures released by the Interactive Games and Entertainment Association showed a small decrease in the number of video games sold at traditional retail outlets.
New Zealand Game Developers Association chair Ben Kenobi said developers were no longer focusing on physical sales.
"I would actually say that they're dying. As with any kind of market like that I don't think it will ever fully go away. But it will definitely have to re-think itself."