Video games retail in the Pacific region is not unlike that of Europe.
The market faces many of the same hurdles, such as the digital transition and decline of boxed sales.
Challenges unique to the area include the rise of grey importing, a harsh disparity on both price and release dates with those of other PAL territories and, in Australia’s case, strict censorship rules.
But publishers are facing these challenges head-on by offering products unique to these regions.
“One of the key challenges is the pressure of rapidly changing technology and decreasing size of the retail market,” says Ubisoft Australia MD Edward Fong.
“In Australia, the situation has been exasperated by the strong exchange rate and economy. Ubisoft is working with retail partners to encourage consumers to purchase locally by releasing ANZ Collector’s Editions and other added value with games purchases.”
Robert Kingston, director of Aussie distributor All Interactive adds: “Towards the end of last year, consumers realised they were being overcharged for games now that the Australian dollar is so strong.
“Heavily documented adverts and current affairs TV programmes provoked the perception that the public were being overcharged. Throughout Q1 this year, several publishers were forced to drop prices to closer align with international pricing. We are now in a period of uncertainty while we wait to see what the new pricing models look like.”
David Nye, sales and marketing manager at distributor AFA Interactive, reports that retailers must choose their stock carefully: “Quite often a title sees a European or US release some time before hitting Australian shores, which means that Metacritic will have a comprehensive round up of critical acclaim – or the lack of it.”
Australian retail buyers and the discerning Australian public rarely support games that have been panned by the international press.
”Kinect and Move have also helped continue work begun by the Wii and DS, driving mainstream acceptance of video games as a major of form of entertainment.
“With the introduction and rapid expansion of motion gaming, the casual segment has been really strong in the last few years,” says Fong.
“The growth can be largely tracked by the success of the fitness and dancing genres, which in turn, is reflected in our Just Dance range.”
DIGITAL DOWN UNDER
The Ubisoft boss adds that the online space has also seen rapid growth, but technological barriers mean downloads have yet to fully take off in the way they have in other territories .
“Due to the disparity between broadband infrastructure in Australia and New Zealand compared to the rest of the world, we are, to an extent, behind in overall market share,” explains Fong.
“However with the advent of the National Broadband Network [a wholesale-only, open-access network currently in development in Australia] due to bring the country’s internet infrastructure up to speed, companies – both inside and outside of gaming – are jockeying for space.”
Nye reports that there is “uncertainty” in the Australian market created by the approaching transition to digital: “Steam is already making a large impact on PC software sales and Apple/Android devices continue to increase their shares of the total market. How local traditional retailers, publishers, and developers manage their way through this change is yet to be seen.”
With definite growth areas in the digital space and a sturdy bricks-and-mortar scene, the Pacific is an attractive region, but Ubisoft warns start-ups to research the nuances of both Australia and New Zealand before taking the plunge.
“It’s important to acknowledge that this market is unique is highly unique given its influences from Europe and the US,” says Fong.
“These markets are unique in many ways, in terms of consumer tastes, retail environment, lifestyle, even our media and marketing campaigns.
“It’s not easy to simply transplant overseas initiatives into our local market – you need to have a huge amount of local market knowledge of all of these elements to operate effectively in Australia and New Zealand.”
Currency: Australian Dollar
GDP (Per Capita): $66,984
Capital City: Canberra
Currency: New Zealand Dollar
GDP (Per Capita): $35,374
Capital City: Wellington
BigW, David Jones, Dick Smith Electronics, EB Games, GAME, GameStop, Game Traders, Harvey Norman, JB HiFi, K-Mart, Myer, Noel Leeming, Target, The Good Guys, Toys R Us, WOW Sight & Sound
AFA Interactive, All Interactive, Fiveight, Gamewizz, HES, Mindscape, Namco Bandai Partners, QV Software, Tuff Kat