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Video games sales dip not deterring start-up developers

Wednesday, 8 February 2012 | By Michelle Hammond

Australia’s interactive games industry remains buoyant as local developers lead the way, industry groups say, despite a dip in “traditional retail” computer and video games sales during 2011.


According to new data from independent market researchers NPD Group Australia, there was a 12.8% contraction in “traditional retail” computer and video games sales to $1.5 billion in 2011.


This includes all revenue generated from console hardware, games software and gaming peripherals sold through retail.


However, it excludes sales from online retail, downloadable content, online games subscriptions, in-game micro-transactions and mobile phones.


Rob Curry, chief executive of the Interaction Games & Entertainment Association, saying the rising popularity in digital games isn’t reflected in the latest results.


“Whilst the NPD data has revealed a dip in ‘traditional retail’ sales, which... 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,” Curry says.


According to Curry, there is a lot of evidence pointing the ongoing health of the interactive games industry, citing figures from Telsyte and PricewaterhouseCoopers.


Technology analyst firm Telsyte estimates Australians will spend more than $450 million on online gaming subscriptions and in-game purchases in 2012.


“Online gaming subscriptions and in-game virtual goods sales... will account for around 20% of the overall digital goods and online subscriptions market in 2012,” Telsyte’s Sam Yip says.


PricewaterhouseCoopers is forecasting 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% of this revenue.


However, it’s been suggested the local development scene is close to collapsing, with a string of studios – including THQ’s Melbourne and Brisbane studios – shutting their doors in recent years.


But Anthony Reed, chief executive of the Games Development Association of Australia, believes local games developers are 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,” Reed says.


“In 2011, Australian-made games featured highly across multiple digital platforms.”


Reed says in 2011, Brisbane’s Halfbrick Studios recorded more than 120 million downloads of their popular game Fruit Ninja, and 11 million for the recently-released Jetpack Joyride.


Meanwhile, Melbourne-based IronMonkey Studios won Apple’s Game of the Year award with Dead Space.


Into 2012, we will see many more innovative and creative properties made by Australian studios releasing to a global audience,” Reed says.


For developers’ benefit, NPD statistics offer insight into consumer preferences:

  • The top 20 software sales featured shooter games, role-playing games, dancing games, timecards and sports games.
  • The most popular genres are shooter and action (both at 19%) followed closely by family games (16%).
  • Software for the peak Christmas weeks (weeks 51 and 52) was up 13% in value and 5% in units.