Australian Games Industry Sees 16% Decline In Sales

Today the Interactive Games & Entertainment Association released figures stating that sales of video games in Australia are down 16% year on year, despite accumulating a grand total of $1.7 billion in revenue in 2010.

It seems like a grim number, but iGEA CEO Ron Curry claimed that it was a steadying year - with Australia navigating the Global Financial Crisis more effectively than most other western economies, the bouyant numbers of the last couple of years were bound to take a more realistic turn in 2010.

“Compared to the most other international territories," began Ron, "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 levelling or righting of the market.”

It's also important to note that the numbers did not include sales from digital sources such as the App Store, Xbox LIVE, PSN or Steam - sources which are starting to account for a rapidly growing percentage of our collective video game spendings. Finding ways to account for this new outlet accurately is one of the new challenges for the GfK - which collects and collates the data - as the games industry grows in new directions.

“As the industry continues to evolve and interactive entertainment is delivered through increasingly diverse channels," began Ron, "it becomes more difficult to aggregate sales data through a single source. Anecdotally, sales of interactive entertainment products are continuing their healthy growth; however, the ways these products are being consumed and engaged with is expanding and changing dramatically, as is the industry itself.

“Digital downloads, online subscriptions, micro and mobile games and alike are expanding consumer spend into areas that we are unable to measure in the traditional manner. 2011 will continue to see consumers investing in a wide range of interactive entertainment offerings which will further strengthen the ongoing success of the industry,” said Curry.

The lower number can also be attributed to the fact that we are in the tail end of a console cycle - both in terms of home consoles and handhelds. Hardware sales were down 27%, compared to only a 13% decrease in console game sales. Surprisingly, PC games saw a resurgence, with sales increasing by 7%.

Despite this year's decrease, sales in the games industry are projected to increase to $2.5 billion by 2014.


Comments

    I wonder how much sales are down solely due to ozgameshop.com

      This, absolutely. eg: Killzone 3 - EB $109. Ozgameshop $58.

      Sales in Australia are dropping? *Really?*

        I'm pretty confident that I spent less on games in 2010 than I did in 2009, but actually bought MORe, because I discovered ozgameshop (and to be fair, game-lane).

          ?

          *looks up ozgameshop.com*

          OH MY GOD. How did I not know about this?! So, so much money, I could have saved... *weep*

      I've bought 3 PS3 games from ozgameshop in the last month - each for under $25. Love it.

        I only recently got a PS3 as I've been primarly an xbox gamer, but I'll probably be doing the same. I can go and buy the old stuff I missed out on for cheap. God of War, Resistance, Infamous, maybe even Killzone to see what the hype was about.

      Even better with all the $5 off vouchers they've been sending out lately.
      They're pretty much the only place I ever buy physical copies of games from any more, aside from the odd slightly cheaper sale from CDWow or when it's something hard to find that I need to grab from Ebay.

    Honestly, this quote covers the reasons:
    "It’s also important to note that the numbers did not include sales from digital sources such as the App Store, Xbox LIVE, PSN or Steam"

    When I walk into Harvey Norman and see decade-old games retailing for $90, I die a bit inside. I feel that the only two physical purchases I'll make this year will be Skyrim and Crysis 2.

      So strange though that PC games were up 7% at retail. That blew my mind.

        Let's remember that COD:BLOPS and Mass Effect 2 were released last year, both multi-million-unit-selling franchises.

        I think COD:BLOPS even broke the billion dollar amount in sales (dollars, not units, lol)

        World of Warcraft and Starcraft.

      I saw Fallout 3 (Not even GOTY Edition) at Myer for $109, wtf!!

    This is easily explained. I got started importing steadily that year. There's your 16% downturn\

    :)

      ^^^ This.

        Thirded. I spend no small amount each year on games, and I used to import every now and again, perhaps a total of 5-10% of my purchases. Had been doing so for about the last 15 years.

        But that changed last year, and now I'd say I import about 80-90% of my games purchases. All solely due to the invisible AU tax on games that only seemed to increase when out dollar was nearing parity.

    Love the PC and fantastic news that sales are picking up. Still very peeved with DRM on my games but.... Can't understand the business model...it's making an encryption that ensures only people dumber than you can't break.

    I'm glad they didn't just block their ears and yell 'piracy' but considered the other sources people now use to acquire games.

    In the last year digital delivery/downloads accounted for approximately 50% of my game spending, which is a huge increase over the previous years. Higher download limits, faster internet and lower international prices make for a much better customer experience IMHO.

    Plus there's also international stores who ship games to my door cheaper than going to a local store to buy. If there wasn't region locking on some consoles or the occasional sale item I wanted I probably wouldn't use bricks-and-mortar stores at all.

    I'm sure we've all seen the complaints (and evidence) many times of the international prices being much lower than our local prices and I don't think I'm the only person going out to find the best price for a game. I think if local retailers do want to see their $2.5b increase in the next 3 years they need to adjust their methodologies or find a way to offer something the consumers can't get from other avenues of purchase which are considerably cheaper.

    A new round of console releases may help buoy the market but their are more parents like myself - who are connected/online/tech-savvy/whatever you want to call it - who will not pick up the games for kids in store. My son and I have had Nintendo DS' for a couple of years and almost every game has come through an international store.

    "The lower number can also be attributed to the fact that we are in the tail end of a console cycle – both in terms of home consoles and handhelds"

    Are we? Maybe for the handhelds and possibly for the Wii but I would say we're mid-cycle for the 360 and PS3.

    For the majority of my games i am still buying retail but i am finding myself buying more and more digitally (Steam and D2D). However even though i have had more usage then i have ever had before, i am still wary of buying games digitally if they are over 8-10GB.

    I still like to buy boxed copies but i am seeing myself going more and more towards buying them from the UK with ozgameshop, zavvi and 365games. However for games that i need to have NOW (Crysis 2, Mass Effect 3, Assassin's Creed etc...) i will still buy here in Aus.

    I easily bought the majority of my games over the past year on steam. seeing as though i only discovered it this year i went crazy and bought more games than i ever would. Obviously, i bought less retail games too, and if i did buy retail a lot of them were imports.

    I would routinely buy games if they were <$60
    but at 80-100 I only purchase surethings, and with gamerankings on the mobile phone, I more often then not just walk out empty handed.

    I know I spent considerably less on games in general this last year, and due to personal economic considerations I used online purchases and importing far more often.

    2010 felt a bit quiet in game releases for me.I wasn't really interested in anything in Q3/4 of the year, and the games I was interested in didn't have much replay value so I didn't see the point in paying RRP for them.
    Now I don't buy any games full price unless they're that good. ;\

    Gfk data is a bit of a joke anyway. A while back JB Hi-Fi stopped providing DVD sales data to Gfk, a retailer that accounts anywhere from 40% up to 90% of sales depending on the genre of DVD. I'm not sure if they stopped providing Video Game sales data as well, but I suspect they might have given how arrogant they are, which really makes you wonder how they are guessing those missed sales (Gfk have no option but to guess now).

      Whoomp there it is.

      The downturn is all estimates anyway. GFK data sources are shrinking each year. They dont capture EB nor JB Hi-Fi , like WTF , do they pull their figures out of their arse or what.

    I know I spent more on games last year than ever before. No downloads either. Funnily enough I didn't spend a cent of that at a retail shop in Australia. Ozgameshop is a blessing.

    I find it odd that they didn't even acknowledge international purchases though. It would have counted for quite a bit of money lost. Granted, not as much that was spent on steam probably.

    I just looked at my games shelf and had a think about it, I've only bought 2 games domestically in 2010, Dance Evolution (because I wanted it the same day I bought Kinect) and Aliens vs Predator (for the facehugger, obviously). Everything else (100+ games easily) were either via download like Steam or from online shops like 101cd.com ...

    I know many of us Australian Kotaku-ites love ozgameshop, but I'm sure the 16% can be explained away by digital sales.

    I bought more games from GOG.com than physical releases, even if the games are a lot cheaper than new titles. And I know that a lot of people (with newer computers than I) spend a whole heap of money at Steam everytime they have one of their big sales.

    I think if GfK could count digital sales then we might have even seen a slight increase in 2010. Though I am interested in how big an impact imports have had on a national level.

    lol really didn't expect anything less. The prices are just beyond the extreme in Australia, you'd be crazy not to import your games

    This is not surprising in the least, and in my opinion it will only get worse. We have a dollar which is currently beating the US currency but they are paying $59.00 for a new release title when we are paying $108.00 for the same game. On top of it all we have to pay more for a censored version because our government is incapable of making a decision on the R18+ rating issue. With alternatives like Ozgames shop and Steam why would I buy here? I want to buy games in oz and support our economy but my government is made up of old men who don’t know jack about technology.

    $ 2.5 billion by 2014? So me buying 2nd hand games isn't going to cripple the video games industry after all?

      It doesn't mean that there will be good games to buy in 2014. Hollywood keeps making money every year. But it might be that there are less interesting and creative games around.

    I hope they've accounted for the EB 7-day return policy into those numbers. You know, while we wait for ozgameshop deliveries.

    Anyway, I only bought Black Ops and probably some other old game in the Year 2010.

    It's this year's data that will be interesting, with the crazy game line up. At least 7-8 games that I will be buying, online.

    It doesn't include online distribution? Then it's a crock of shit.

    You'll probably find there was a substantial increase in actual sales, it's just the number of physical retail sales fell due to the vastly increasing prominence of online retailers.

    Who's running the pool for how long it takes the retailers to try to use these figures to justify the GST on imports?

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