Home Industry Market Games industry 'traditonal' retail sales at $1.1 billion

Games industry 'traditonal' retail sales at $1.1 billion

Games industry 'traditonal' retail sales at $1.1 billion  Featured

Australia’s interactive entertainment industry recorded $1.161 billion of ‘traditional retail’ sales last year as many in the gaming community supplemented their traditional gaming with mobile and online content.

The CEO of the Interactive Gaming Entertainment Association (iGEA), Ron Curry, said today that despite a contraction of 23 per cent compared to computer and video game sales in 2011, the association remained confident in the industry’s health.

Curry said that the latest data from independent market researchers NPD Group Australia, which included all revenue generated from console hardware, games software and gaming peripherals sold through retail, revealed a 23 per cent contraction from the corresponding 2011 period.

Yet, as the NPD data excludes sales from online retail, downloadable content, online games subscriptions, in-game micro-transactions and mobile games, Curry said that the data failed to account for the growing popularity in the mobile and digital space.

“As Australians consume video games across a broader range of mediums, it’s becoming harder to get a true indication of the value of the industry via a single source.  While there is a decline in traditional sales, the gaming industry as a whole remains buoyant as people shift towards a ‘hybrid’ model in their consumption of interactive entertainment.”

Curry cites technology analyst firm, Telsyte, which says it expects that Australians will spend over $730 million on digital games subscriptions, virtual goods and mobile games in 2013 - an increase of 18 per cent from the estimated $620 million generated in 2012.

And, according to Telsyte Senior Research Manager, Sam Yip, the growth in digital gaming is driven by mobile app gaming on smartphones and tablets, which he says is “offsetting the decline in physical purchases and even pushing the overall games market into growth.”

Curry says that apart from the increasing move towards digital content, the figures released by NPD showed a drop in physical sales “due in part to the ageing gaming consoles, a trend we saw back in 2005 at the end of the last console cycle.”

Curry also cites a  PriceWaterhouseCoopers’ report - Australian Entertainment and Media Outlook 2012 – 2016  - which forecast that the Australian interactive games sector would grow by a compound annual growth rate of 7.4 per cent over the next four years.  

“Furthermore, the interactive games sector is expected to demonstrate the biggest growth area in consumer spending with the exception of the Internet, outstripping the forecasted growth of Music, Film and Subscription Television.”

One sector capitalising on the growth of digital is the Australian game development industry with Antony Reed, CEO of the Games Development Association of Australia (GDAA), pointing to the recent announcement by the Federal Government to invest $20 million into the games development community. Reed said this was a sign of the health of the local industry.

“The funds represent an investment in an industry that has continued to develop in Australia, with local game developers continuing to show their capabilities around the world. The continued success of Firemonkeys, 2K Games Australia, Halfbrick and Kumobius are clear examples of the strength of the industry here in Australia. The investment by the Government will be used to further secure jobs, encourage innovation and creativity, and promotes investment in Australian talent,” Reed said.

 Key highlights from the NPD Group research included:

•    December 2012 pointed to increased spending on annualised franchises like Call of Duty, Skylanders, Assassins Creed and FIFA

•    Based on the top 10 computer and video games in December 2012, the value generated by those 10 titles accounted for 46% of all sales, up over 12% from the previous top 10 titles in December 2011

•    The PC market saw a unit increase this year, up 3.4% on 2011 behind strong performances from titles such Diablo III and Guild Wars 2

•    While overall hardware units declined by 26.9, high definition consoles experienced a much softer decline of 10.6%

•    With consumers becoming more price conscious and looking for value and deals in their purchases over the Christmas period, consoles with bundled software or accessories grew by 66% in dollars over December 2011

•    Gaming peripherals did see increases in units and value this year, as units grew by over 20% largely due to the success of Skylanders Giants.


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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).


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