Best of a bad crunch

Best of a bad crunch

The credit crunch has already taken its toll on many sectors. From the automotive industry to manufacturing and retailing, the companies that were once the cornerstones of the British economy are suffering some of the country’s biggest losses. It seems that no one is immune to the global meltdown, which has already seen a dramatic drop in consumer spending.

Yet one of the few sectors that is bucking this trend is the computer gaming market, which has seen an 18 per cent growth in volume sales over the last year, despite consumers reigning in their overall spending on their home entertainment products such as music and DVDs.

THE  GAMING EXPLOSION
TNS research has shown that music sales have fallen by 10 per cent in the last year, with female buyers cutting down on purchases by a substantial 16 per cent. Similarly, DVD sales recorded only six per cent growth in the same period. Male buyers were the main drivers behind this slight rise, buying nine per cent more than they did last year. However, this lacklustre performance in the home entertainment market has not affected the gaming industry. In fact, the number of computer games sold increased by almost a fifth in the last year. Female buyers have contributed the most to this rise, buying 21 per cent more games than they did in 2007.

This growth can be largely attributed to the new consoles that have taken the market by storm and which have introduced a new breed of audience to the sector. The DS and the Wii have brought a demographic into the market that is not normally associated with gaming. Women make up the most significant part of this new segment, but gaming manufacturers have also started to target older consumers with brain training games that are starting to substitute more traditional pastimes such as reading a book or watching TV.

But it is not only the gamers that have changed – the way people play has also turned the industry on its head. The birth of casual gaming has made gaming more widely acceptable and today, console and games publishers are falling over themselves to produce products that don’t target the traditional gamer. Wii Fit and Guitar Hero have proven to be a massive success and this Christmas, a raft of further titles targeted at the casual gamer have been launched, including Guitar Hero: World Tour and PlayStation’s LittleBigPlanet.

This year, we expect Christmas sales of computer games to follow the trend, taking seasonal sales to a new height. The increased press coverage and awareness about gaming has eliminated some of the guesswork traditionally associated with buying games as gifts, and even people that aren’t gamers themselves now feel confident when purchasing them.  

However, it is interesting to see that the overall rise in volume sales is being driven by certain regions in the UK while others – often unexpectedly – are experiencing a drop in sales akin to that of music and DVDs.

Looking across the UK, London has historically recorded the highest sales volumes in the country. However, the last year has seen it knocked into second place by the Midlands, which now accounts for 16.2 per cent of the UK’s gaming market – compared to London’s 15.7 per cent. The South, East Anglia and Wales have experienced the most significant growth in volume sales, with the latter recording a 67 per cent increase over last year and the other two not far behind at around 40 per cent. But in actual market share they are still lagging far behind London and the Midlands.

PC  DOWNTURN
As Britain enters a recession, the gaming market finds itself in an enviable position. Not only are sales among ‘traditional’ gamers growing, but the customer base is widening too. Women, families and older generations are all jumping on board – seemingly at the expense of other home entertainment products such as DVDs and music – and the market is responding by giving them an ever increasing choice of games.

But it’s not all good news: sales in PC games are starting to decline as consoles become more powerful and popular, and consoles manufacturers such as Nintendo are upping the stakes with celebrity-backed advertising and heavy promotions. Whether PC gaming manufacturers fight back is yet to be seen, but with several new products in the pipeline, the boom is showing no signs of slowing down.

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