The Australian Retail Games Market Contracted By 23 Per Cent In 2012

Australian spent a total of $1.161 billion on video games during 2012, a number that represents a 23 per cent contraction in the market locally but, despite this, the Interactive Games & Entertainment Association (iGEA) remains confident that the Australian industry as a whole, inclusive of digital spending, is continuing to grow.

“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," explains Ron Curry, CEO of the iGEA. "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."

The problem, when trying to convince others that the Australian industry is growing, is the lack of hard numerical evidence but local technology analysts at Telsyte estimate that digital spending will increase by 18 per cent during 2013 to $730 million. A decent increase on the estimated $620 million in 2012.

"The growth in digital gaming is driven by mobile app gaming on smartphones and tablets, which is offsetting the decline in physical purchases and even pushing the overall games market into growth," said Sam Yip, Senior Research Manager for Telsyte.

Ron Curry also pointed to the end of the console cycle as another legitimate reason why physical sales are in decline.

"[T]he figures released by NPD show 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," he said.

Consumers are moving towards digital, and the decline in physical sales is most likely offset by that, but this won't be of any consolation to local retailers. 2012 saw GAME — Australia's number 2 specialist games retailer — go into liquidation, if 2013 continues along a similar trend of contraction specialist retailers will continue to struggle.


Comments

    From what I can recall, my use of the Australian Games Retail Market contracted by 100% in 2012.
    It was a slow year. The two console games I bought were from Ozgameshop, everything else was digital distribution.

      I agree, there's been very few games worth buying recently - retail or digital. Certainly lacking enough that I'm surprised it's not greater than 23%

      Last edited 13/02/13 11:22 am

        I agree 100%. I find now that the AAA titles that are hyped for years, end up being very average. Plus the fact that any brand new PC game can be purchased for around $30 at some point a few days before or after release day kind of brings a new price level to what people will pay. I have not and probably wont ever purchase a game for more than $30.

    I must admit I send all my money overseas when buying games, I reckon I buy a game on average, per fortnight, and when an overseas game/cd key retailer can over me a product for anywhere between 1/4 - 1/2 of what I find in Australia, I don't feel bad about it.

    I'm not sure if other people are experiencing what I'm experiencing, but I've personally dropped my gaming spending quite a lot, becoming somewhat jaded and refusing to buy games I know will sodomise my wallet through DLC just to make the story coherant.

    ie. Assassin's Creed, anything by Capcom, most EA games...

      I've basically lost my passion for games, and I think this is a big part of it. There are only a handful of AAA developers who releasing games with a focus on fun and engagement. The rest are focused on trying to remove as much money from your wallet as possible. I've found some solace in the Indie scene, but its not the same.

      Just dont buy the DLC. I rarely do and if i do its usually through steam when its basically a dollar.

        I think that's the point. I will buy DLC, but only if its a genuine value add, not if I think it should have been there in the first place. For instance, I'll be buying Dragonborn, but I won't buy Playstation Allstars.

      I'm with you mate.

      I haven't bought a retail game since Skyrim and even then only because it was on sale. It's mostly just stuff for around $10 off Steam or just bouncing around various F2P games. Most AAA games aren't worth the $60 to me now on days. Although interested, I'll pick them up for $10 3 years down the line. Because that is what they are worth to me.

      Capcoms DLC are mostly cosmetic in my experience but the companies you definately need to watch out for is EA, Ubisoft, THQ and Bethesda.

      On the contrary my spending shoot up dramatically since late 2011 after I completely stopped with MMO's.

      I get exactly what you mean. DLC announcements have put me off buying a lot of games recently. Now I hold out for the 'GOTY' editions... which often never come.

      A good example is FFXIII-2, which I heard needs a DLC purchase to see the ending. Now I'm not interested in the game at all. It's partly because I'm cheap, partly because I don't want to support companies that make those kinds of business decisions.

    Most of my purchases last year were either digital or through non-Australia based online distributors (ie. ozgameshop) with a few retail purchases for convenience. It would be useful if this report contained an indication of non-Australian online purchases because then maybe the local shops could see why they need to stop charging such ridiculous prices...

      Obviously you haven't been reading the news recently about how jacked up prices are here in Australia, and its not the retailers fault, but it's Microsoft, Apple and many others who set the prices. In terms of retail, their margins are the same here as they are in the US.

        Except in many cases the prices are jacked up to appease retailers and suppliers - steam and green man gaming have both said as much.

          It doesn't matter how much a game is if your profit margin is shit. Microsoft charge near full price for a game for retailers per launch copy. Jb hifi loses several dollars on most games they sell and EB makes hardly any profit at all, in fact on a brand new game they'll lose as much as 20% if you price match. It isn't retailers. That's an excuse, they're greedy no doubt but all the gain goes to the publishers and there's incredible pressure on retailers to meet publisher demands and very real monetary repercussions if they don't. You need a better reason to bag out retailers, that might work in the schoolyard but the boogeymen aren't always the people you point the first finger at.

    I increased my games purchasing by at least 300% in the last year.

    All of it was either through OzGameshop or PSN.

    Let me guess most people realized that buying the games from sites like Oz Game Shop saves on average about %50 so why bother buying retail. The only games I have brought were second hand or something that wasn't on Oz Game Shop lol! Retailers need to be more competitive bottom line.

    Personally I haven't brought anything on XBLA or PSN because those prices are still more expensive that online shops that will send out a 'physical' copy. They really need to sort out the pricing of digital distribution in this country.

    The guys at Ozgameshop must be swimming in pools of Aussie dollars Scrooge McDuck style. I bought all my physical games last year bar 1 from them. The latest? My copy of Ni No Kuni arrived yesterday around $25 cheaper than JB. Looks like 2013 will be more of the same.

    I think I managed to go the entire year in 2012 without spending any money locally. All imports and digital. Sorry about publishers reaming you for unit price retailers but I'm going where the best deals are and they are certainly not here.

    90% of my game spending in 2012 was done through non regional distributors in order to side step both the local and online Australia tax, I wouldn't be surprised if people finally figuring out ways around the system is responsible for this.

    I mainly buy digital.

    It's just easier, also with games generally requiring big downloads anyway, and being loaded into online shop platforms on the computer. There's very little benefit.

    Nothings more annoying than buying a physical copy of a game, coming home and then realizing you have to wait hours for it to download all the updates or in some cases most of the game content.

    Now I just buy online. Pre-load / download it while I sleep. It's easier that way.

    Although Origin has gone to crap with speeds recently. It'll probably take me a week to download Crysis 3.

    Geez in the last 12 months I bought 14 retail games (3 3DS and 11 360) and 8 XBLA games. Also 2 games on Steam and 9 iOS games, none from o/s this year

    Last edited 13/02/13 11:39 am

      I am impressed you can actually remember the numbers.

    You know what would be worse than paying more for games? Not getting any games released locally.

      How would it be worse than what it is now?

        You'd lose the convenience of buying locally, would be harder to browse and notice gems you may have missed in the media. You would have to import all your games and then if you got a broken copy you would lose money on shipping if you had to return your product. Would lose the ability to try out a game from EB then take it back if it's not up to snuff.
        Those are just off the top of my head. Sure there's more.

          I get your point, but i have found more gems online. A ton of games don't get shipped here and that's not only within recent years.

          "You would have to import all your games and then if you got a broken copy you would lose money on shipping if you had to return your product."

          That depends on the Web site. I once had a book from the 2K Store arrive with the corner crushed. All they asked was for a photo of the damage and they send me a new copy, fee.

          The other instance was with Amazon. A HD-DVD arrived with the case but no disk. Reshipped again at no cost.

          Finally, Games Universe. Game order lost, free reship.

          So the solution is simple - be sure to read the returns policy and even get in touch with customer service before placing any orders.

          "Would lose the ability to try out a game from EB then take it back if it's not up to snuff."

          While that is nice, I think that is more so EB can fuel its current practice of making a sizeable profit off used games sales.

            Wow, i hate EB but there's so much vitriol here. I worked for there for 3 years and it never amazes me how they're the scapegoat for everything except the things they actually do wrong. If EB didn't sell used games, they would die. If they didn't sell and trade them at ridiculous prices, they'd struggle greatly. I'm not saying it's respectable but there simply is no way in hell EB could ever effectively compete with dept. store prices. They are charged through the roof for brand new games, which is why they upsell you like 3 damn things before you can pay. People talk like EB comes out on top every year because they're exploiting people when the used games barely fund what they spend on brand new games. It's the cheap controllers, hdmi cables and chargers that give them all their profit. A lot of them make upwards of 70% margin, that's something to get annoyed about.

              "If they didn't sell and trade them at ridiculous prices, they'd struggle greatly. "

              Do I also need to mention their aggressive behaviour when it comes to collector's editions. Rather than have an open market, EB has this tendency to get exclusive rights to collector's editions and then charging outrageous prices.

              So to say they struggle is the understatement of the year. They are doing fine. They are even opening stores all over the place (there is three alone in the least at Melbourne, and two in Geelong. All of which are within walking distance of each other in either city.

              There is no struggle here - if anything they are bordering on anti-competitive behaviour by restricting other retails to the standard editions and any other edition between the standard and the collectors edition.

              And what has this behaviour done? Its only exacerbated the trend of our dollars going off-shore. Especially those like me that refuse to pay around $200 to $250 for a collector's edition when the exact same thing costs only $100 or less in the states.

        Don't get me wrong, I buy most of my stuff from ozgameshop now but occasionally I can pick up a new game for the same, cheaper or not too much extra locally.
        That meant I had the game in my hands as soon as I saw it. Normally I wait, but I like having the option to choose.

    The retail games market contracted so much because so many of us discovered how much cheaper games are to get imported or online instead.

    I'm another person who helped shrink the Australian retail games market. Every game I've bought for the past couple of years has been bought from overseas or bought digitally. The reason? It costs me less money. Do I need to explain anything else here?

    Hear hear to Bangers

    Last edited 13/02/13 1:01 pm

    A lot of my hard earned dollars also went overseas. Not just for games: movies, cartoons (I'm a sucker for Hanna-Barbera, etc) and other components for my consoles.

    While price is a factor it is also because I became serious about gaming later in life than most so many of the gems are long out of print. Some games simply don't end up here.

    For example, despite their popularity it is easier to find Final Fantasy games online than locally. Another series I am a sucker for is the Star Ocean series where not all the games have come out here.

    While I am on the topic, Chrono Trigger, Chrono Cross and Xenogears are some of the best games I have ever played but they will never see a local (Australian) release. I'd mention Xenosaga but that became a train wreak (as a series and release wise here) the second game onwards.

    I buy all my games from Shin Tokyo. They're maybe $5 more expensive than Oz Game Shop and I don't have to wait for shipping. they also import a metric shit load of Japanese games. Stuff I've never even heard of before. Prices become even cheaper because I'm a member. I don't know how they do it, but who am I to question this brilliant magic?

    Shame they're only in Adelaide.

    I paid $30US for Aliens : Pile of Average at getgamesgo.com, fuck australian retail.

    Oh and I forgot to add that our crapness at retail extends to nearly every other type of retail out there, every 2 weeks for 10 weeks I visited a kitchen equipment store to be told that they don't have any and they'd have it in it 2 weeks, the last week they asked someone else when I got a bit snarky because of how long it was taking, they said it wasn't something they carried any more. 2 days later I had one from amazon for half the price. I try to shop locally when I can, across all kinds of interests, and in the last year 1 store in australia has given me good service at a not too ridiculous extra. You get prompt service with accurate information supplied if you ask a question at amazon, not the 'we're too good to serve you' crap you get here.

    These results aren't really surprising. Yes, it can be partly put down to people buying overseas, but what I think has done more damage is just the lack of must have games that came out last year. For most of the year it was pretty barren compared to previous years.

    For me it wasn't a case of not buying locally because of the price, it was a case of not buying anywhere because the games were shit. I bought one game on release date which was also the only game I bought locally. It (Paper Mario) was only $1 more expensive than Ozgameshop, so we're seeing some improvement.

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