While the retail end of the gaming industry is suffering from a decline in sales, as latest by the latest batch of NPD figures, the digital market is booming. Valve says Steam sales went up 97 percent on a year-over-year basis. Direct2Drive, which is run by IGN Entertainment, has also seen a boost in sales, recording a 56 percent increase over the same timeframe. Meanwhile, Microsoft says paid downloads on Xbox Live have netted a 73 percent increase over the past six months.

No yearly figures were obtained by IGN for Sony’s PSN service, but from what we’ve heard from official channels, sales are on the up. And with over 9.8 million PSN users accounted for, it’s no surprise. Nintendo, on the other hand, has been extremely coy in releasing sales data for its WiiWare and VC service, so it is anyone’s guess as to what the numbers are like on that front. We’d assume they’re doing alright, though.

Despite this impressive surge in sales, analyst Michael Pachter believes the day when digital sales begin to overtake retail is still far off, with current figures only representing 5 percent of the overall market.

Online Sales Surge During Industry Downturn [IGN]

Read more: PS3 Slim Debut Causes Sales To Soar Past Expectations In Europe, SCEA: PSPgo Catapults Hardware Sales, PSN Transactions In US, Top Global Markets: Q3 2008 Edition, SCEA: PS3 Sales Up Nearly 300 Percent Since Nov, NPD To Withhold Hardware Sales Figures