Games outpace films and music as decline in UK physical entertainment market slows to 3%

The ensuing popularity of boxed video games has helped to slow the retraction of the UK’s physical goods market.

The physical entertainment business (that’s games, films and music) shrank by three per cent during Q2 of 2015, ending July 5th, according to market tracker Kantar Worldpanel.

That’s quite a significant upswing from the seven per cent drop experienced during Q2 of 2014, with major retailers Tesco, Amazon, GAME and Argos all seeing sales increase, raking in an extra 8.5 million.

Games have been the strongest performer over the last quarter, supported by sales growth in software for the current generation of consoles,” explained Fiona Keenan, strategic insight director at Kantar Worldpanel.

Performing particularly well was GAME, which has increased its market share within the sector to 31.7 per cent from 29.1 per cent last year.

"It continues to be the preferred choice for owners of the Xbox One and PS4, taking 36.5 per cent of their combined software sales.”

Smaller outlets have also managed to see growth in the boxed entertainment segment. Overall, independent stores made an extra 4.3 million versus 2014, to a total of 47.7 million.

In terms of games, Grainger Games was a stand-out improvement, more than doubling its boxed games market share from one per cent in 2014 to 2.6 per cent this year.

Like games, sales of boxed video products (films, TV shows and so on) also improved versus 2014, falling by just 3.6 per cent during Q2 versus 9.5 per cent over the first three months of 2015.

However, music didn’t fare so well in comparison to its physical siblings, declining in Q2 of 2015. Asda, Morrisons and Sainsbury’s combined lost 3 million in terms of year-on-year boxed music value. This is despite the segment’s strong growth during the previous quarter.

Asda suffered the greatest drop in total entertainment market share of any retailer. It held 12.6 per cent of the market during Q2 2014, but that was down to 9.2 per cent this year – a 3.4 per cent reduction. This left it level-pegging with GAME, which saw its year-on-year share grow by 1.1 per cent to similarly hold 9.2 per cent of the market.

UPDATE:An earlier version of this story stated that GAME had lost 3.4 per cent total market share, while Asda had gained 1.1 per cent. Kantar has since revised its figures to clarify that, in fact, the opposite is true.