UK games market clutches chest, bleeds out sales in 2012

Retailers have blamed a lack of good video games in the summer of 2012 along with a patchy, uneven release schedule for the 17 per cent shrinkage in the value of the UK games market last year. Worth £1.9bn in 2011, the sector brought in £1.6bn in 2012 according to stats released today by the Entertainment Retailers Association ( …

[Anonymous Coward]

Wot?

No blame on file sharing? Did someone misplace the press release template?

[K]

Re: Wot?

Or the 2nd hand games market!

Makes me laugh when I look at XBox live and they charge upto £49 for each game - 1 example I can think of is Skyrim, I can buy the dam thing new from Game for < £30 and < £15 if I brought it used off eBay.

[Anonymous Coward]

Re: Wot?

What makes me laugh even more is the £59.99 Playstation Store price tag for Dishonoured!

Are people really that stupid?

[K]

Re: Wot?

"Are people really that stupid?"

1 person voted this down, so I think we have our first contender (I would ask them to raise their hand, but they are too busy licking glass).

[LarsG]

And

When they release the 'New' games they are nothing more than the same old genres that provide nothing really new only a regurgitation of previous ideas and slightly better graphics.

There are very few real 'OMG this is amazing new Game Play!' Only 'oh another war game' etc etc.

[James Cooke]

*Worth £1.9m in 2011, the sector brought in only £1.6m in 2012 *

Pretty sure you mean billion otherwise the sector is in more trouble than I thought

[diodesign]

"Pretty sure you mean billion"

Yes. Whoops! That typo has been fixed.

C.

[slightly-pedantic]

suspect data?

Leaving aside the error that those game sales were Billions not Millions of pounds...

Whilst the retailer channel provides solid data on the decline of physical goods. I don't believe many of the major outlets for online game distribution provide this kind of information. For instance Steam, the largest of the distributors for PC games doesn't provide such information.

Is it too cynical for me to speculate on the value of this as a story if the total is heading South rather than staying boringly about the same?

[Erroneous Howard]

Re: suspect data?

If that is true regarding Steam then I might be inclined to agree with you for at least a portion of the difference. I think the PC games market is relatively small in comparison to consoles but I know this year Steam have been selling a much wider variety of products. Most of my old gaming friends buy the majority of their PC games there now.

It has been a really slow year for "good" game releases though, not that many major "big money" releases that I can remember, and practically all of them in October/November. Next year will be interesting with the new GTA due to be released (assuming it is on time) as that normally is good for a fair few sales.

[dogged]

Re: suspect data?

I tend to buy my console games online, too.

Getting to the shops is a pain and frankly, I'd probably spend more than the reduction I could get in fuel, parking and "having to take the Mrs to a place where there are shops" so XBox Live will do nicely.

Does the PS3 also allow you to buy full games online? Or the Wii? If so, I suspect it's certainly an impact worth noting.

[Hal Dace]

Re: suspect data?

The PS3 certainly does. Don't know about the Wii. I guess bricks-and-mortar gaming stores are being hit by the fact that game-buyers are very "online" people/

[Anonymous Coward]

Re: suspect data?

I think this report is solely based on retailers. Online sales and digital distribution will certainly not be factored into this. So can we say the games market itself isn't doing too badly, and that bricks and mortar retailers like Game are feeling the strain? I guess so.

[mark 63]

solely based on retailers

"solely based on retailers"

Ah well, the whole statistic means F all then, whats the point giving figures just for the weakest, soon to be dead, dinosaur part of the sales market?

You may as well say "Door to Door sales of Video games are down!" , although that would be more honest.

[kyza]

Not too much analysis here...

...no breakdown in the types of product downloaded (i.e. full games, expansion DLC or other forms like Themes, avatars and so on).

Also fails to mention that last year generally has been seen as 'one year too many' for the current generation of consoles (despite the fact that Xbox & PS3 have seen some amazing content released).

Not enough meat to start a debate really.

[Ninetailed]

The idea that there has been a "dearth of attractive releases" is rubbish. 2012 was a year of absolutely stellar games.

Trouble for these people was that it was mostly online; they're losing their business to Steam and its lesser-known competitors, all of whom have enjoyed comfortable growth, though Steam still takes the lion's share.

[itmonkey]

Smart phones and tablets

Does the videogames section include Smart phone and tablet technology? Easy to imagine the spend in these areas going up and traditional sources of income going down.

[Old Cynic]

No mention of taxes?

Interesting that this story hasn't led to howls of tax evasion by the people who scream at Amazon/Google/Microsoft et al...

If you think about it, the UK's large spend on games, music, software, movies could (likely already is) handled through tax-efficient arrangements and no physical goods change hands so even easier than the Amazon setup. It would be interesting to quantify the impact on the treasury as soon there'll be no workers in shops selling these things, so no income tax, NI, shop rents etc...

[DS 1]

Good times ahead

PC gaming is on the up. The games are good, there are exciting things due for release - its again the platform to be on, with even midgrange gear able to oblitaerate what a console can do. And steam is largely great. However, this means that the high street is dead. Its abuse and hatred of the PC and selling its soul for the console means its time is up. If you walk into the histreet stores and talk PC they have eyes glazing over and either don't know or don't care; why should I give them my custom. Same with PCs. Who on the high street cares or offers a good deal? Almost no one. So people will buy their XPS boxes from Dell.

Its a shame that MS is such a mess with 8, otherwise things could be better. The PC will be the platform in 2013 - but it will be that DESPITE the vendors and the high street. The high street will suffer horribly. Which devs will want to be on 6 year old consoles in 13? No one worth their salt.

[Don Jefe]

Re: Good times ahead

PC gaming is doomed to a niche audience whereas consoles continue to improve and can do almost all of what most PC users need. Browse the web, email, 'social stuff' and games, most users don't need anything else. A PC that can compete with the reliability and quality of a PS3 or Xbox 360 costs 4x as much and doesn't offer the ease of operation (just works) as a console. Why would anyone buy a PC for gaming?

[Naughtyhorse]

Re: Good times ahead

2 reasons

a> cos i can work on it too

b> it's better

QED

[FrankAlphaXII]

Re: Good times ahead

>>A PC that can compete with the reliability and quality of a PS3 or Xbox 360 costs 4x as much and doesn't offer the ease of operation (just works) as a console.

[Citation Needed]. Funny that my desktop cost about the same as a PS3 and its been more reliable than the PS3 has with better components. If you're buying from a retailer like Dell or HP, you deserve what you get.

>>Why would anyone buy a PC for gaming?

Because some of us aren't console shackled stooges and actually like to do things like modding, or are into independent developers who wont pay Sony, Nintendo or MS licensing fees because they cant afford it. And in all honesty, I can and do build my own PCs aside from Laptops, I know what components are in it, I have control over my hardware and can incrementally upgrade so by the time your 6 year old console has caught up, Im still ahead of you in regard to hardware and software.

I have no rings of death. The only screens of death Ive had since Windows 2000 were when I had a DRAM module incorrectly seated and another time from forcing a Sony laptop into using video drivers that weren't intended for it. But the thing is, If I do manage to bork my system I can always restore it from a backup in a matter of an hour (or less) instead of having to take it to a Sony Store or mailing the bastard back to MS. I dont have to fuck around with being locked into one vendor or developer either. I also have backward compatibility, something Nintendo believes in and Sony did until it became expedient not to.

I do own a PS3, but Im much more into PC gaming.

[chiller]

Re: Good times ahead

My brother recently showed a friend BF3 on his pc and was gobsmacked as he had been playing on PS3, he immediately ordered a gaming pc. I will ask him why he bought a PC for gaming.

[Ravenger]

Re: Good times ahead

Retailers stopped selling PC games shortly after they shifted focus from new to second hand sales. Most PC games use DRM or product keys to prevent resale, which is much less profitable for retailers compared to console sales. They can resell a single console game over and over again making a large profit each time, (coincidentally cutting out the distributor, publisher and developer's share from the profits), whilst a PC game can only be sold once.

Of course they didn't reckon on Steam and the other digital distributors picking up their discarded ball and playing with it, leading to a resurgence in PC game sales, and a generation of PC gamers who have no need to walk into their overpriced stores again.

[DJ 2]

But but but.. it's always been the case. Most of the games come out from September to December, with a few that ran over schedule released in Jan / Feb. Nothing has changed since gaming began with Atari and the home computers that followed.

[Robert E A Harvey]

It's a recession

Look lads, that's what a recession is. When food and petrol start to cost a bigger chunk of a shrinking budget, people cut down on fripperies. Like computer games.

[Anonymous Coward]

Just a thought

It might be an idea if the games were cheaper in stores. Most shop utterly overprice their games resulting in guess what, people not buying them. Combine this with utter crap customer service and you have a recipe for no sales.

[K]

Re: Just a thought

Agreed!

If I'm not desperate for a game, I'll wait a couple of months and buy it off eBay for half the price.

[Isendel Steel]

Re: Just a thought

Yep - or get it in the Steam sales - big discounts going on at the moment - although I do prefer to have a physical copy.

[John H Woods]

Re: Just a thought...

... also, in retail stores the price of new games reflects time elapsed since release rather than quality, and it is only once they are on the pre-owned shelves that any relationship between price and quality is apparent.

When the games are new, however, they are often cheaper in the supermarkets than in the specialist stores. It's almost as if the latter don't want to compete ...

[Anonymous Coward]

Re: Just a thought

Sadly the prices that the shops charge reflects the considerable overheads of running a retailer, and most of those costs aren't readily controllable by the retailer, being set by government or the market, such as business rates, rent, staff wages, which collectively represent around three quarters of the costs of retail distribution. As a rough guide, a big high street games vendor would have a gross margin of about 28-30% on each game they sell, so they "make" £8.40 on each £30 game they sell, of which about £7.50 would be consumed in shop operating costs (ie before your corporate costs). Running an average game store would cost you £300k a year, split four ways between wages, rent, rates, and "other" - where would you find (say) a fiver per game of exciseable cost? Rent isn't under your control, neither are rates or other. Wages are set by the market or government (neither at a very high level), and you're beholden to be open whenever shoppers might expect it (about 3,100 hours a year).

In my view cutting the prices probably still won't bring Amazon buyers back into the stores, so they'd only cut their own throats even faster.

[The Original Steve]

Re: Just a thought

Yet Tesco next door to Game sell the same items for £10 less each. Appreciate the independent shops probably pay more for the goods in the first place but I would have thought Game would be well placed against a supermarket. I suspect Tesco's cost per employee is more (slightly better pay, better prospects for pay increases) than Game too.

Oh - and if it's due to retail coats (although amount of rent aside I don't see how it's any different to a UK based online merchant. Staff, building, admin etc.) then why are the games just as expensive on their website as they are in store?

[P. Lee]

Re: Just a thought

The problem is lack of differentiation.

Do you think people would go to a shop for petrol if they didn't have to be physically there to collect it?

With food its different - you generally want to see the particular apples you are buying and have a browse around for unusual things you may not have noticed. The games, what you see before you buy (the covers) is completely unrelated to the content - rather like buying a pig in poke, so you may as well buy online and save a few bob.

[Andalou]

Re: Just a thought

Tesco's customers will be spending two to five hundred pounds per month every month on other goods. Of course they can afford to cross-subsidise (just as they can offer cheaper petrol or Sky can offer 'free' broadband (if you commit to spend £65 or £75 every month)).

And the reason why an online store that also has a high street presence can't have a large price differential - uhm. surely that is self-evident?

[Naughtyhorse]

17%

That is, amazingly, the same figure as the reported increase in sales of board games this year.

weird or what?

[lglethal]

Steam for the win

I have to admit that I spend way more now on games since a friend introduced me to Steam then I ever did when visiting shops. The prices are far more reasonable, the selection greater, and I dont have to face some snotty nosed teen looking down on me because I'm not buying the latest stupid shoot 'em up with an awful story line and instead buying something with a good story or some originality.

It would be interesting to know how the development companies (and the distributors) feel about the competition between online and physical sales. Online sales dont really have a cost (except probably some fee for bandwidth per sale or something from the seller (e.g. Steam)) whereas a physical sale needs to produce something (plus ship it, provide promotional material, staff a shop to sell it, etc). So an online sale may actually be better for the development companies and distributors profits even when selling for a lower retail price... I have no data to prove this of course, its just a thought...

[Aldous]

how do digital sales to non uk factor in

i.e i buy call of battlefield 37 through steam (US Based?) for £30 instead of high street store for same price. money is missing from high street figures but won't count on digital?

[Bruce Everiss]

The sale of boxed games has been in decline since 2008. That decline accelerated last year. Soon there will be no boxed games. Using plastic and cardboard to distribute digital data is plain silly and is only hanging on at the current level because of the heritage console platforms.

There is a movement towards online free to play titles such as World of Tanks and CSR Racing. These allow the player to enjoy the game without paying and to only invest in it if they want to. This superior business model is hastening the decline of boxed games.

Then there are mobile phones and tablets. These benefit from portability and app stores with hundreds of thousands of titles. They have become the main gaming platform with Angry Birds, for instance, having been downloaded over a billion times.

[NomNomNom]

free to play is pure evil

[RyokuMas]

Would be interesting...

Comparing these stats to the change in indie and mobile gaming... maybe people are waking up to the fact that they just don't have the hours to spend on these sprawling AAA epics and would rather play something that's fun from the get-go rather than invest hours accomplishing very little.

[NomNomNom]

Re: Would be interesting...

"maybe people are waking up to the fact that they just don't have the hours to spend on these sprawling AAA epics"

Like large outside open area games like fallout and skyrim? sure. But traditional room-by-room FPS games have only gotten shorter over time and I don't see anyone celebrating that. I tend to see people complaining about being ripped off by eg a £30 FPS that only lasts 12 hours in singleplayer with no multiplayer.

The problem is because of the heightened graphics that are expected these days. Artists have to spend longer on each level or feature to make it look nice. Level generating in the old days eg doom, quake, halflife was less involved and so more levels could be produced for a game meaning the games lasted longer.

It's not just FPS. Even XCOM: Enemy Unknown wasn't as broad in content as the original XCOMs. Same limited maps over and over again. Again because they were going for quality (graphically) over quantity. Replayability is something players want (higher hours/£) but it's oddly something that designers neglect.

That's why all the multiplayer games are so popular, because human generated situations or even content (eg minecraft) produces a hell of a lot more replayability than is found in singleplayer.

The solution for singleplayer is to use procedural generation more, which is pretty much the philosophy of roguelike games, so that each play of the game is different enough so that it can be played many many times without getting boring (ie repetitive)

[Atonnis]

It wasn't such a wondrous year...

There were only a few awesome releases last year, and there were a couple of steady disappointments, like Mass Effect 3 and Assassin's Creed 3's endings.

What really didn't help sales of games was that people knew they could spend money buying the game new, and STILL not get the DLC included without spending £70+ Thus, it became more cost effective to wait until the game price had dropped down, since it was going to cost you another £10-£20 or more to get the rest of the game, just so you could feel like you'd actually completed everything.

2012 was the year MMOs became just that bit too boring to play any more. Single player games became more repetitive, the RTS genre heard about the upcoming C&C game....and promptly cried out in terror once they heard it's becoming free-to-play.

But above all, 2012 was the turn-around year where years of lies and over-exaggeration finally sank into the consumer mindset - and we all became suspicious and wary of games thanks to historically awful releases like C&C4 and the lies of Peter Molyneux. Thus we bought less, because we started wising up and checking a lot of reviews before buying...and then not buying blindly.

[NomNomNom]

Re: It wasn't such a wondrous year...

also don't forget about all the zero day bugs. Another reason why I wait months before buying (usually)

[Scarborough Dave]

Discs what are those?

When you think about it IOS and Android are generally working in a virtual asset world.

Windows is moving that way with it's App store.

And a great choice of other entertainment media film (Netflix, LoveFilm, YouTube) Music (Spotify, Deezer ) is delivered without real physical media or ownership taking place.

Once you enter the virtual media supply chain actually getting valid data will be more challenging as the off shoring the sale will be much easier.

Where as I used to buy a CD for say £15.99 I now rent from Spotify for £9.99 per month (so I probably paid 50p for the virtual CD, possibly less with the amount of music I listen too).

So no surprise if it looks like sales are heading south!

Also it will not surprise me if PS4 has no Blue Ray drive and Xbox 720 no DVD player - things are moving that fast.

[Kaltern]

3 Reasons why game sales are declining.

1) Obsession with DRM on PC - Simcity V will not only have always-on DRM, but also cloud based saved games, with no way to save offline. No internet connection = no game. This sort of thing just pisses people off and makes them work harder to pirate a game. OF course, we all know the other main reason for this sort of thing; DLC, and due to the success of Sim City 4 and The Sims modding community, EA don't want that, and will force you to only upgrade from their own online store.

2) DLC. Games released with obviously held-back content and then sold as DLC is pissing people off and makes them work harder to pirate a game. If you're going to release DLC, then do it as something totally new and unrelated to the plot of the original game (Assassin's Creed I'm looking at you), instead of just adding 'extra' missions and stuff.

3) Stop pandering to the 15 year old 'I don't need to think, therefore I won't' population. Making games more 'accessible' and 'streamlined' is an insult to those of us who CAN think, and is encouraging those who can't think to never need to. Selling the same tired old crap with new paint is being noticed by everyone, but those developers who would love to add new things to make games more interesting, are being told by publishers to not do it in case 15 yr old Nigel doesn't know how to press more than 2 buttons in at the same time, and actually needs to read words to figure out what to do next, rather than follow a huge GO HERE! arrow.

Oh and it pisses people off and encourages them to pirate the game as it's probably the same as the last one they bought only with a higher version number.

4*) Develop games for the PC, then make it fir on consoles so we actually have games that will push the boundaries of today's technology, rather than stifle it for 6 year old consoles.

* I thought of another reason, and can't be bothered to update the topic.

[SirDigalot]

I love steam

It is sexy, it is quick, it has stuff I want and need often at a good price, I know all my frequently used CC numbers off by heart, I am never safe around a steam sale (despite this year, which I have maintained a level of inebriation that has prevented me from "being arsed" to buy games on sale). I love the fact I get my game now, I do not have to get in the car or on the bicycle, get to town find the store hope they have a copy buy it go back home install it blah blah blah, by then I have hit the same level as "can't be arsed" as being drunk!

no physical media either space on bookshelf for either dead trees awards trophies, pictures of naked women, more booze!

Also now as a responsible member of productive society or something like that my chosen family cave is a little while away from "town" and since here in the consumerist hell of the sunshine state, the time I have to go mall hopping is the same time that every other gosh darn person with a car and family goes too, so the places are packed, but now everyone is a lot quieter and most seem to be walking round with their heads buried in their phones playing tweeting face-booking so steam makes sense, it saves me gas money and, unless the mall will turn out to be an episode of dead rising, my sanity.

however...

downloading your entire steam library after something goes horribly pear shaped with the machine... not cool! although not awful if you have a decent speed you can leave it over night for the most part, unless you have one of those really annoying data cap things by your isp, admittedly I have only need to do this once so far, but still a pain.

I miss the whole shopping experience, in some ways, maybe because I remember going to the store as a wee nipper and looking at all the cool games in boxes, also checking to see if my PC had the required specs, fondling shiny boxes, the excitement of wondering if the game was any good, that "new media" smell, that subtle nod that you used to give other fellow cool people in the store when looking at certain games, almost paramount to human interaction, possibly even a discussion of a title played, handing over real money that weird paper stuff that you had done numberous hours of work/chores/waited for a birthday to get the sense of achievement! The hustle and bustle of the mall, the smell of food from the food court, the screaming kids, the obnoxious security guard who always pulls you aside when you leave thinking that you probably stole half the contents of the shop even though he had been watching you like some perverted vulture all the time and the real shoplifter had left ages ago! then the distraction of walking past another favourite store and seeing something you also could have bought with that money and realizing it would be some time before that was affordable too, and then the journey home, the nice smell from the food courts overpowered by the pizza/"Italian" food store that apparently had something against vampires, or in reality people, the ride home, the half hour getting the darn thing installed, OMG it was a bloody nightmare now I think of it... never mind.

I still have most of my original PC games, however none of my sega games not having said console anymore, and also not having a TV for which some would even work on.

still it was a nice trip down memory lane for a few minutes..

[NomNomNom]

Re: I love steam

"downloading your entire steam library after something goes horribly pear shaped with the machine... not cool! although not awful if you have a decent speed you can leave it over night for the most part, unless you have one of those really annoying data cap things by your isp, admittedly I have only need to do this once so far, but still a pain."

why do you need to download the whole library? do you regularly play all the games you have? i am the opposite in fact the best thing about steam for me is i don't have drawers full of game boxes i'll never play again

[montyburns56]

Re: I love steam

"downloading your entire steam library after something goes horribly pear shaped with the machine... not cool! although not awful if you have a decent speed you can leave it over night for the most part, unless you have one of those really annoying data cap things by your isp, admittedly I have only need to do this once so far, but still a pain."

Did you know that you can backup Steam games so that you don't have to keep downloading them? It's not 100% effective as sometimes Steam doesn't recognize the back up and tries to download it again, but it usually works.

[Justicesays]

Re: I love steam

"however...

downloading your entire steam library after something goes horribly pear shaped with the machine... not cool!"

Erm, this is vs digging out the physical media for your entire gaming collection, installing each from (multiple) CD/DVD's , dealing with any additional DRM they have (registration codes etc), and then, PATCHING the whole lot to the non-broken versions, with the patches for older games only being available from third party sites full of crapware and adverts?

Oh, and then losing all the save games (unless you actually back those up unlike your game installs)

Yeah, Steam makes recovering from a borked PC a real hardship, what with avoiding almost all of that ,apart from the occasional GFWL or "home grown" and generally shitty DRM or multiplayer login system .

Oh, and Steamcloud saves.

[Anonymous Coward]

Am I to be the only one to state a glaringly obvious thing...?

Putting aside partisanism* and shocking release schedules, which (oddly) do not take into account holiday periods for le kiddies, OTHER than dumping everything at once close to xmas.... The VG "Press" lists of most highly anticipated games for the next year are all fracking sequels, and mostly FPS at that. AAA titles, that, on the whole offer little in the way of ingenuity or creativity.

Any other industry with a similar contempt, re-hasing old former "greats" (with less imagination, less engagement and less engaging content) ad-nausea would be struggling with declining profits too... oh wait... *looks Hollywood wards*

*Disclaimer: I like my consoles, like my pokemons, I have them all. Something which will stop fairly soon I fear.

[Pypes]

End of cycle.

That's all.

All the big budget AAA money will be getting sunk into next gen projects, the used market has become homogenised and most gamers will have 95% of whatever games they care to own from the last 5 years, along with a backlog of half a dozen they haven't even got round to playing yet.

A nice fat hardware refresh and some half decent early releases and the money will be flowing through the tills like water again.

[MJI]

Here goes

2011 was a good year for games, lots of really good ones released, this year is a little dry and a lot of the good games are download only (eg Journey).

Also less money this year - recession.

That said we have some new handheld games consoles, so time to get a few for that.

My favourites from 2012 : Dishonoured, Journey, Uncharted Golden Abyss. So that is one full AAA release for a non handheld.

Between us in 2011 we bought 5 or 6 big games.