TERRITORY REPORT: Australia & New Zealand

Ben Parfitt
TERRITORY REPORT: Australia & New Zealand

Like most nations around the world, Australia and New Zealand are still dealing with the aftermath of the recession.

The games market suffered a slight dip in 2010, but analysts are confident it can grow again over the next few years. But that’s not to say local firms are resting on their laurels.

Each country presents games companies with a unique set of challenges – some man-made, and others beyond their control.

The most notable example of the latter is last month’s earthquake in Christchurch, New Zealand, a tragedy that prompted Sony to delay MotorStorm Apocalypse out
of respect.

“In addition to the flat retail climate in the region, the full economic affect of the Christchurch earthquake will be felt in New Zealand,” says Michael Ephraim, MD of Sony Computer Entertainment Australia and New Zealand.

“The relatively smaller size of the nation’s interactive games market, coupled with a variety of independent distributors means there is a less consolidated approach to investment by video games publishers.”

Even a boost to Australia’s currency has had repercussions for retailers, triggering price wars and driving many consumers to purchase from territories overseas.

“The strong Australian dollar is now enjoying a 25-year high against the US dollar and is equally strong against the Euro and the Pound,” says distributor All Interactive’s director Robert Kingston. “Local distributors and publishers are reluctant to drop their dealer prices in line with the strength of the Australian dollar.

“This has opened the door to a flood of imports which has had a massive impact on the distributors ability to drive their back catalogue as they have done in previous years.”

Like other territories around the world, the market is also becoming more streamlined. Ephraim reports that retailers are focusing almost entirely on triple-A blockbusters and back catalogue titles, with some specialists hoping to drive traffic with rentals.

But none of these issues are enough to dispel the region’s optimism, as games companies search for new market opportunities.

“Lower price gains that offer value for money, micro transactions and DLC are all areas that have potential in the current market,” says Kingston.

“We feel that the industry will be stimulated later in the year when we hope to see a change in console prices. It also appears that we are in for some extremely strong software releases in the last quarter which might be the catalyst that we have all been waiting for.”

Ephraim adds: “Possible consumer spending gains due to the rise in employment and income in Australia are expected to see some erosion by higher interest rates, and economists are expecting a modest retail recovery in the second half of 2011.”

That’s not to say companies should quickly migrate Down Under. As challenging as the market can be for the locals, it can be just as difficult for newcomers.

“There is growth to be had but it’s not a quick win,” says Focus Multimedia’s PR, marketing and licensing manager Alan Wild.

“Anyone looking to open here should pack enough clothes and rations for the long haul, although they would be better advised to look to an established partner for realising the potential here.”


Aside from the likes of LA Noire creators Team Bondi, Australia’s development community is perhaps best known for its iOS titles, such as Firemint’s Flight Control and Halfbrick’s Fruit Ninja.

However, opportunities beyond the App Store are somewhat limited to local studios without support from overseas.

“International funding for triple-A titles has all but dried up,” says Duncan Curtis, executive producer at Halfbrick.

“This has resulted in the closure of many of our larger studios. However, many smaller agile studios have now started up out of those closures.”


Games firms in Australia still have to cope with a strict ratings system where MA 15+ is the highest certificate granted.

It’s a long-running challenge that has seen many of the world’s best-selling games banned in the region, including the upcoming Mortal Kombat from Warner Bros.

At the time of writing, Warner is appealing against the decision arguing that the violence seen in the arcade brawler is similar to that of other titles already available on the market.

In December, Australia’s state attorney-generals agreed to draft guidelines for the introduction of an R18+ certificate for games by March 4th.

But, due to clashes with the New South Wales state elections that will be held tomorrow (Saturday, March 26th), the process has been delayed – although no revised date has been given.


Tags: Market Data

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