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Monday, 06 February 2012 15:20

Video games industry doing it tough, but makes $1.5 billion in 2011

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Despite general economic uncertainties, Australia's interactive games industry remains upbeat despite a 12.8 per cent contraction in 'traditional retail' computer and video games sales to $1.5 billion in 2011, according to Australia's Interactive Games & Entertainment Association (iGEA).


The latest data from independent market research group NPD Group Australia, which includes all revenue generated from console hardware, games software and gaming peripherals sold through retail, reveals a 12.8 per cent contraction from the corresponding 2010 period.

Yet, as the NPD data excludes sales from online retail, downloadable content, online games subscriptions, in-game micro-transactions and mobile games, the iGEA's CEO Ron Curry says the rising popularity in digital games isn't reflected in the latest results.

'As Australians continue to access video games through a host of different channels, it's becoming more challenging to aggregate sales data through a single source.  Whilst the NPD data has revealed a dip in 'traditional retail' sales, which according to our latest Digital Australia report still represents the lion's share of the games industry, other research has pointed to the growth in digital downloads,  multi-player online games, in game purchases and online subscriptions,' says Curry.

Local technology analyst firm Telsyte estimates that in 2012 Australians will spend over $450 million in online gaming subscriptions and in-game purchases in 2012.

'Online gaming subscriptions and in-game virtual goods sales are growing strongly in Australia, and will account for around 20% of the overall digital goods and online subscriptions market (which consists of 26 categories such as Internet video, Internet music and digital news subscriptions) in 2012,' Senior Research Manager at Telsyte Sam Yip says.

Other key reports highlighting the growth of the interactive entertainment market include:
PriceWaterHouseCooper forecasted revenue for both traditional and digital sales to reach $2.5 billion in 2015, with online and mobile games predicted to generate close to 50 per cent of this revenue.
IDC anticipates demand for handheld gaming hardware and software to rise by roughly 20 per cent in 2012.

Ron Curry, CEO of iGEA, said, 'Overall, we're seeing a lot of evidence point towards a continuing healthy interactive games industry.  The incredible success of games such as Call of Duty 3: Modern Warfare 3 which became the fastest entertainment property to hit the $1 billion milestone globally, eclipsing the previous record set in 2009 by the film Avatar, is only one example of this.'

Anthony Reed, CEO of the Games Development Association of Australia (GDAA), also credits the success of local games developers as a driving force behind the interactive entertainment market.

'Global consumer confidence in the digital space is encouraging exceptional growth in the Australian game development industry. In 2011, Australian made games featured highly across multiple digital platforms. For example, Brisbane's Halfbrick Studios recorded over 120 million downloads of their smash-hit, Fruit Ninja, and 11 million for the recently released, Jetpack Joyride, and Melbourne-based IronMonkey Studios won Apple's coveted 'Game of the Year' award with DeadSpace. Into 2012 we will see many more innovative and creative properties made by Australian studios releasing to a global audience,' said Reed.

Key statistics from NPD Group Australia:
·         The majority of games (54 per cent) sold were rated G and PG
·         The top 20 software sales featured shooter games, role playing games, dancing games, timecards and sports games
·         The most popular genre are shooter and action (both at 19 per cent) followed closely by family games (16 per cent)
·         Software for the peak Christmas weeks (51 and 52) was up 13 per cent in value and 5 per cent in units

NPD data in 2011 was measured against 52 weeks compared to 52 weeks in 2010.

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