TERRITORY REPORT: Southern Europe

Southern Europe has some of the most valuable gaming markets on the continent.

But it’s a territory that’s also home to a handful of countries battling to overcome issues hindering their growth. Most countries in the region are still recovering from the recent recession that gripped Europe.

Greece and Portugal are two examples most affected by these struggles as their respective High Streets have seen the number of smaller games stores dwindle. The closure of these outlets has seen consumers flock to larger retailers – but not even these goliath brands are immune to retail woes. GameStop pulled all of its games operations out of Portugal last year.

So why is selling video games proving so difficult in these countries? Unsurprisingly, it’s all down to costs. Greece and Portugal are home to some of the highest games prices in the whole of Europe as titles are typically priced at €70 (58) – almost ten per cent of the average monthly net salary in Greece.

These prices aren’t limited to just new titles either as even dated releases such as 2008 hit Left 4 Dead still carry high asking prices.

As a result, the majority of consumers in Greece and Portugal have turned to grey importing to buy their titles. More shoppers are turning to online outlets such as Amazon, and even stores in the UK to avoid the high costs set by local retailers. And it’s a problem that could only become worse in the next few years as countries such as Spain and Italy face the possibility of even higher taxes – a move that would force retailers to hike their prices even further.

But it’s not all doom and gloom in Southern Europe. Spain remains one of the most valuable markets in the world ranking fifth in Europe and tenth in the world.

It hasn’t been affected nearly as badly as its neighbouring countries and the country’s games market was valued at €986m (817m) by the end of 2013 – a figure driven by its population of 19.5m gamers.

It’s easy to see why the country’s games market is thriving too, as industry analyst Newzoo reports that 55 per cent of these consumers actively spend money on their games – a very different landscape to both Greece and Portugal where consumers are far more hesitant to spend on luxury items such as games due to lower disposable income.

Elsewhere in Southern Europe and Italy’s games market ranks in just above Spain at No.9 worldwide, boasting over 21m gamers.

Both Spain and Italy are very similar to games retail here in the UK. A look at the top selling games in Spain reveals a striking resemblance to here in the UK as FIFA 13 was the most bought game in the country between September 2012 and February 2013. A more detailed comparison of the two countries’ charts reveals a greater correlation between the buying habits of Spanish and UK gamers with the likes of Call of Duty: Black Ops II, Animal Crossing: New Leaf and Tomb Raider all topping the charts in both countries.

As expected, football titles such as FIFA and Pro Evolution Soccer are amongst the most popular games brands in Italy, too.

However, like many of its fellow European counterparts, Italy continues to struggle with piracy. Despite over half of its gamers paying for their games, the report by Newzoo also found that six out of 16 of these paying consumers admitted to illegally downloading games from file-sharing sites more than once per month.

It’s a worrying statistic given that such a widespread use of piracy is no doubt limiting the potential for greater game sales in the country. Spain is another territory associated with piracy as a report by law firm Clifford Chance identified the country as one of the biggest contributors of illegal games. Spanish Copyright Law doesn’t include any restrictions on piracy, which allows those engaged in the practice to continue without fear of punishment.

Games retailers in Southern Europe told MCV last year of their anticipation of the next-gen consoles, which they expected to provide a healthy boost to the market – and they certainly didn’t disappoint.

PS4 has continued Sony’s dominance at European retail to take a healthy lead over Microsoft’s console in the majority of these markets. Xbox One has yet to launch in Greece or Potrugal and will not arrive until later this year.

Spanish website Meristation claimed over 80,000 PS4s had already been sold in the country by the end of 2013 with a further 12,000 machines on back order. Meanwhile, Sony Spain CEO James Armstrong also revealed the console had outsold its rival Xbox One at a ratio of 3.5 to 1.

Elsewhere in Southern Europe, Armstrong confirmed Portugal has the biggest market share for PlayStation in the world. This share was estimated to stand at 90 per cent in 2005 but the release of Xbox 360 saw Microsoft gain some ground.

Nevertheless, demand for PlayStation hardware still greatly outpaces that of both Nintendo and Microsoft’s products – a factor only set to worsen given the delayed launch of Xbox One in a handful of these Southern European countries.

THE FACTS

SPAIN

Population: 46,704,314

Currency: Euro

GDP (Per Capita): $30,315

Capital City: Madrid

Languages: Spanish

Key Retailers

Alcampo, Amazon, Carrefour, El Corte Ingles, Eroski, Fnac, GameStop, GAME, Hipercor, Media Markt, Toys R Us, Worten

Key Distributors

Digital Bros, Koch Media, Namco Bandai, Nobilis

Top Developers

Abylight, Akaoni, Black Fire Games, Digital Legends, Enigma, Enjoy Up, Gammick, Gextech, Legend Studio, Mercury Steam, Novarama, Over The Top, Plunge Interactive, Pyro Studios, Tonika Games, Virtual Toys

GREECE

Population: 10,815,197

Currency: Euro

GDP (Per Capita): $21,617

Capital City: Athens

Languages: Greek

Key Retailers

Media Markt, Public/Multirama, Plaisio, Germanos, Seven, Kotsovolos

Key Distributors

Zegatron, CD Media, Namco Bandai, IGE, Nortec, Enarxis, Beacon

Top Developers

Total Eclipse, Aventurine, Eyelead, Games2Gaze, JustAGame, Sidebar, Flipped Horizons

PORTUGAL

Population: 10,799,270

Currency: Euro

GDP (Per Capita): $20,663

Capital City: Lisbon

Languages: Portuguese

Key Retailers

Worten, GAME, MediaMarkt, Fnac, Auchan, Radio Popular, Toys R Us, Pingo Doce, El Corte Ingl.s

Key Distributors

Ecoplay, Infocapital, Koch Media, Namco Bandai

Top Developers

Biodroid Productions, BSure Interactive, Ignite Games, Seed Studios, Vortix Games Studio

ITALY

Population: 59,943,933

Currency: Euro

GDP (Per Capita): $35,123

Capital City: Rome

Languages: Italian

Key Retailers

Expert, Fnac, Games Bond, Games Life, GameStop, Iper, La Feltrinelli, MediaMarkt, Mondadori Multicenter, OpenGames, Panorama, Gruppo Pam

Key Distributors

Cidiverte, DB Studios, Digital Bros/Halifax, Koch Media, Leader, Namco Bandai, Newave, Shardan

Top Developers

Activart, Adventures Planet, AlittleB.it, Artematica, Consorzio Milonga, Double Jungle, DP Studios, Digital Tales, Forge Reply, Imagimotion, Just Funny Games, Frame Studios, Magic Dream Games, Milestone, Raylight Games, TiconBlu, Twelve Games, Ubisoft Milan