Game sales down 16% but consumers still playing

Australia’s interactive games and entertainment industry recorded a 16% drop in sales in 2010, according to new research.

The data, compiled by independent market research group GfK Retail and Technology Australia, compiles all sales from hardware, gaming peripherals and traditionally-boxed software sold through retail outlets.

The data excludes revenue generated from online retail sales, downloadable content, online games subscriptions, and games delivered to mobile devices.

According to the report, console game sales declined by 13%, with 19.9 million units sold in 2010 compared to 19.3 million units in 2009.

However, PC game sales increased by 7% from last year, with 3.1 million units sold in 2010.

Ron Curry, chief executive of the Interactive Games & Entertainment Association, says despite the fall in sales, the industry remains upbeat compared to international markets, which have suffered from tough economic conditions.

“Our local interactive entertainment market has done considerably well to weather the global economic crisis, which affected a broad range of entertainment industries and what we are seeing now is a leveling or righting of the market,” Curry says.

“Innovation continues to thrive and millions of Australian families are engaging with games through multiple formats whether it’s on a mobile device, online subscription or in more traditional PC and console formats.”

For the third consecutive year, the data reveals family-friendly games were the bestselling genre, accounting for 21% of the number of console game units sold, narrowly beating action games at 20%.

According to David McLean, general manger of Xbox Australia and New Zealand, said in a statement that Christmas sales are a “telling time” for future trends and gauging what is popular among consumers, citing the launch of the company’s motion-sensing Kinect as an example.

“With Kinect, we have changed the landscape of the gaming and entertainment industry. We have opened gaming to a new audience and essentially created a new genre in controller-free entertainment,” he said.

McLean believes the future of the gaming industry will move towards the delivery of an integrated entertainment experience for consumers.

A recent report by business information analyst firm IBISWorld rates video games as the second fastest growing sector in 2011, forecasting growth of 11.9% or $433.9 million.

According to IBISWorld general manager Robert Bryant, the industry is reaping the rewards of a broader customer base.

“Older gamers are maintaining their interest at the same time as new gamers embrace industry products as a fresh form of entertainment, with female gamers opening up additional avenues for revenue as a burgeoning new audience,” Bryant says.

Another report by PricewaterhouseCoopers reveals games sales are predicted to reach $2.5 billion by 2014, driven by the growth of online and mobile games.

Online games are forecast to reach $534 million by 2014 and mobile games are forecast to hit $496 million in the same period.