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Gaming "Good Opportunity" Despite Slump

By Oonagh Reidy | Wednesday | 13/02/2013

'Traditional' gaming sales are on the slide, but its not game over just yet as mobile, app sales soar and a slew of new consoles are due to arrive in the market.

Looks like mobile is now the name of the game.
Gaming sales, which include sales of consoles, software and peripherals, fell 23% last year to $1.16bn , according to researchers NPD Group.

Console sales fell 27% per cent alone last year, and average prices of games fell 15% due to competition from apps and mobile, although unit sales didn't suffer as steep a decline.

However, NPD data excludes sales from online retail, digital gaming downloads, in-game transactions and mobile games, indicating the slump may not have been so dramatic, if the new gaming formats were included.

Interactive Games & Entertainment Association (iGEA) CEO Ron Curry told CN that the data fails to account for the growing popularity in mobile and digital markets, and says the gaming slump was due to a "collision of factors" including ageing consoles and games at the end of their life cycle. 

Sony and Microsoft are readying new console reveals this year and are expected to be available ahead of this Christmas. Curry expects growth in the first phase of the new gaming life cycle this year.  

Despite the steep contraction iGEA insists the outlook is bright, as the gaming community ditches traditional gaming in favour of mobile and online. PWC predicts that by 2016, 50% of all sales will come from digital and mobile.

Curry also notes retailers have adapted to the digital gaming eco system and are selling games in different ways such as online digital downloads, and says the new online gaming world is a "good opportunity" for retailers.

Telsyte expects that Australians will spend almost 20% more ($730 million) on digital games subscriptions, virtual goods and mobile games in 2013.

The local interactive games sector will grow by an annual rate of 7.4% over the next 4 years - the biggest growth area in consumer spending with the exception of the Internet, outstripping music, film and Pay TV.

"Consumers have learnt if they have a screen they can play a game" be it a TV, tablet, smartphone and PC, without even using a PlayStation or Kinect console, says Curry.

However, its hard to predict whether software prices will fall further, he says, noting the emergence of the 'freemium' gaming model, where games are given away for nothing and players make in-game purchases, which will also drive sales.

With the release of new, more expensive consoles, Curry predicts prices of the old consoles will drop even further.

Key highlights from NPD Group Australia research:

December 2012 saw increased spending on annualised franchises like Call of Duty, Skylanders, Assassins Creed and FIFA.   

The top 10 gaming titles generated almost half of all sales.

While overall hardware units declined by 27 per cent, high definition consoles experienced a much softer decline of 10.6% per cent

Bundled software or accessories grew by 66 per cent in value

Gaming peripherals did see increases in units and value this year, as units grew by over 20 per cent largely due to the success of Skylanders Giants

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