They downloaded a lot of games during the Great Depression, too.

Times are tough. Banks are failing. People are out of work. Bearded men in finely tailored suits are making numerous television appearances, predicting the end times. None of this is good news for the videogame industry. In fact, compared with June 2008, last month saw a 41% decline in retail game sales. But, when times get tough, gamers start downloading. The statistics are these: Valve’s Steam download service has garnered a 97% increase in year-over-year sales. IGN’s Direct2Drive download service has increased 56% in year-over-year numbers. And sales on the Xbox Live Arcade increased by 73%.

Could such phenomenal increases in online sales account for the fact that physical retail sales are suffering? Respected games industry analyst Michael Pachter says there’s no chance. “Downloads are probably $1 – 2 billion worldwide this year, compared to a $26 billion packaged goods market. Significant, but not enough to cause a 20% monthly sales decline,” quoth Pachter.

If such growth trends in online sales continue, however, one can easily expect more and more marquee, AAA titles to be released via download services like Steam and XBLA.

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