UK Games Sales Down, Again.

A couple of years ago I remember reading some news that sales within the games industry had declined around 25%, following those poor figures there was more bad news last year that sales had declined roughly a further 20%.

You might be forgiven for thinking that surely it isn’t possible for things to get any worse? Well, they have. MCV have analysed data from Chart-Track and are reporting that sales in the UK for the the first 26 weeks of the year of software, hardware and accessories was £963m a drop of £180m on the same period last year. Software (games) sales generated £533m, a year-on-year decline of 10 per cent while hardware sales were down 32 per cent at £256m.

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Declining sales are never a good thing, but when an industry is reporting declines on declines of declines, it’s pretty dreadful news for all concerned. We’ve already seen a number of studios close down and job losses throughout the industry in development studios, publishers and retailers and a further shrinking of market will further put jobs at risk.

Speaking to MCV, the ELSA director general Mike Rawlinson said: “UK consumers are also getting their gaming entertainment in a variety ways. They are increasingly downloading video games from websites, and are playing games on their mobiles or through social networking sites – not only on consoles. This is proof that interactive entertainment is expanding way beyond its traditional boundaries.”

It will come as no surprise to anyone with an ounce of business knowledge that these declines cannot go on indefinitely, and they are surely the reason that developers and publishers are looking for other revenue streams like the single use codes found in a variety of games to wanting a slice of the pre-owned market.

Source: MCV.

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32 Comments

  1. No demand normally means, a drop of prices is to come. We haven’t seen this yet, and until we do, this could carry on, especially in these hard times of economic uncertainty.

    • That’s the obvious solution, but they also need to bring things out that are slightly different to generate more interest.

    • A drop in prices is an interesting concept within gaming.

      Customer demand often means bigger games, more enemies & better graphics etc. The move to HD means more (and higher skilled) artists are needed, and more talented engineers & coders are need to try and get all these extra pixels processed and displayed on screen with a stable framerate.

      This being the case it means costs have risen but the market is declining… would gamers be happy to have smaller lower budget games for less money. With the big budgets being reserved almost exclusively for established franchises?

      • I agree here, but then, things have always moved on in gaming and new technology is always progressing. I dunno, it’s a strange one. I thought I read the other day that gaming makes more money than hollywood/films these days? If thats true, then how comes the industry is losing money? I don’t understand it.

      • I think they would, the be all and end all of a game isnt the framerate, the pixel count or the story. They all contribute greatly admittedly but its the gameplay. Get this right and get everything else to a decent standard and people will play your game.

      • just because the market is shrinking it doesn’t mean they are making a loss – it’s just that there’s less money to go around.

        However, almost all of them are making a loss, Blizzard props up Activision but I don’t think anyone else is close to turning a profit

      • What we’re seeing is a shift away from the old way the industry used to work. Smaller developers are being bought up and the entire structure is working towards a vertical situation. Online development is expanding at an insane speed (the browser games and small stuff we know about). I happen to think it’s the UK pound that regularly constrains investment and this is crippling our early turnover.

      • if that’s the case then we should see games with different price tags:
        god of war 3 should be more expensive than MAG? obviously there’s more operating cost than ever before but that shouldn’t change the prices
        more gamers = more sales = more profit
        expensive games = less gamers…

      • Yes we should

        also the £5 increments is too big, why can’t they charge £40.99 (or whatever) for something instead of making the leap all the way to £44.99

      • Agreed. There should be no price banding at all! If the likes of GTA go up in price and the smaller/shorter games go down in price, that’d be fine with me.

      • Then can you tell me why everybody went crazy when MW2 got a higher price?

      • Because no one likes higher prices, but would it the biggest entertainment release of all time if it was priced too highly?
        Would it still be in the charts 8 months later, despite brand new games coming to the market for similar or even lower prices?

        Also, people love to moan – particularly online where petitions can be designed & deployed in seconds and everyone’s got an opinion in message-boards & comment threads. The amount of noise this creates is probably a thousand times more than people who will actually act on it

      • Look at the majority of games, they’re not crap exactly, but you’d only want them second hand – at best, some you wouldn’t even want at all. So why not make more profitable PSN/mini games and concentrate on one kick ass must have got to get it or die boxed game?
        BF1943 rocked and still does (despite a shit load of bugs) and it was priced perfectly. It’s just a shame there’s no DLC for it. BUT it was based on the solid BFBC1 game engine. It seem to me that there could be more games like it if devs gave it some thought.
        Modern Warfare 2.5 for example. It could be the same as 2 but with different 4 maps and all new maps at that.
        Heavy Rain mini game, based on the same engine, but with a small plot and not as diverse. It would have 2 advantages
        1. it would/could be profitable all on its own
        2. generate sales of the full game before and after the big game gets released.
        Motorstorm PR, same again. A small number of tracks, cars, and music soundtrack. But entirely multiplayer.

        Also why the hell aren’t they releasing soundtracks? They pay for the licencing and even creation of the music, so why not make a few extra quid on them?

      • Modern warfare is a great example. I only bought it brand new on day of purchase because it was so cheap. £26 on day 1. No wonder it made so much money! Others should take note and try the same.

  2. do the figures include downloaded games from psn, steam etc and add-on content?

    • true, more dl stuff could hinder the figure :P

  3. I’ve cut my game buying, need money to live!! Only buy 4 or so games a year on launch and 2 of those are FIFA & COD, everything else is price drops or second hand cheapness.

    • Last 2 years this has been exactly my strategy, the only exception this year so far is I didnt buy FIFA10 but bought Modnation Racers.

  4. Two words: Love & film

  5. Globally, gaming is as huge as ever (isn’t it?) so the UK is suffering. Does this simply tie in with the whole “the UK is too expensive to develop in, for games” situation? A majority of the developers over here are owned by American publishers so I’m guessing they don’t want their dollar to do so little on our shores.

  6. The worldwide recession has had a heavy impact and a lot of people simply can’t afford to buy new. Things will improve as the economy does. In the meantime publishers should cut consumers a little slack lest they risk drivng them away altogether.

  7. i think things like the online pass are a mistake, you have to make your product more attractive to the customer, not less.
    that’s why something like the project 10 dollar thing ea did was much better than the online pass.
    reward new buyers, don’t punish totally legal preowned buyers.

    • That’s the great thing about competition and a free market.

      The market will dictate what is acceptable or not, people won’t put up with stuff en-masse if it’s unacceptable, to expensive or just plain old unfair.

      There will always be someone doing something at the right the price and with fair terms

  8. Stop producing overpriced generic mediocrity then besides if the film industry can sell avatar blue ray for £17 then the game industry can sell COD4.7 for £20

    • Avatar made over a billion at the box office long before it got to Blu-ray

      CoD is one game that can’t be overpriced though, as looking at its sales figures it was priced just right

      • and how much does a ticket cost

      • That’s in a theatre full of several hundred people… it is also a one off showing you have bought nothing and have no product to resell… would you rather a gaming company sell you a £7.50 ticket to watch someone else playing the game and then only release it on disk for £15-£20 after about 16 weeks once they’d made a billion?

        Never has an analogy been more wide of the mark, apart from that second hand car one that some people compare used-games sales to.

      • Financially it’s easy to breakdown. How much did a game cost to develop. How much will it return. How quick will it return.

        My next question would then be “how many more sales would there be if a game was X amount cheaper?”. Always been curious as I idly hope for such an increase in sales that it’ll justify the cut in price per unit.

      • Although its new compared to books, music & movies the gaming industry is still established – and the ~£40 pricetag has been around for aeons now. In real terms gaming is probably cheaper than its ever been

  9. It will only get worse if they continue ripping the people off

  10. Sure companies like Amazon are picking up a lot of business from the High Street.at their prices you can’t beat them and their customer service is superb.

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