Gaming down under

The debate surrounding age ratings has dominated the gaming headlines in Australia over the past 12 months.

However, the lack of an adult certification hasn’t affected the industry’s growth. According to GFK, the Australian video game market in 2008 grew 47.8 per cent year-on-year, with revenues reaching $1.96 billion, a figure that is on par with the DVD industry.

Australia’s gaming output has also been on the up, with the country’s fledgling development community working on some of the biggest games of recent years, including Star Wars: The Force Unleashed, the Total War series and Bioshock.

The Australian market had grown exponentially in the latter parts of 2008 with some of the year’s highest selling titles being developed here,” explains Krome Studios’ CEO Robert Walsh.

Our very own The Force Unleashed for Wii and PS2 became LucasArts’ fastest selling title and De Blob by THQ took the gaming world by storm. But with the current industry contraction we have seen quite a few studios being downsized or closed.”

Indeed, although the development community in Australia is relatively strong, many studios are struggling, with studios asking the government for tax support.

The local arm of the IDGA has been lobbying the Australian government for a while to get the same tax breaks that the Australian film industry enjoys,” confirms Creative Assembly Australia’s communications manager Vispi Bhopti.

This is something we obviously support and look forward to, but it is a battle that is still being fought.”

Despite being geographically close, the New Zealand games market is very different to the Australian one. Nintendo formats are the dominant force in Australia, yet PlayStation remains the console of choice for the New Zealand population.

New Zealand has a very healthy games market,” says Sidhe Interactive managing director Mario Wynands.

We are one of the few countries where Nintendo is not the market leader. PlayStation is the strongest console brand. At one stage we had the second highest PlayStation penetration per capita behind Ireland.”

The development community in New Zealand is also in contrast to Australia. Only a handful of firms deal with console titles, with most of the studios focusing on PC and handheld software. Yet Wynands feels that New Zealand game development is on the up.

The New Zealand development community is small but growing rapidly,” he explains. There are over 20 different development studios, although most operate in the mobile, PC casual, Flash or handheld spaces.

New Zealand is seen as a ‘far away’ country, but we are actually well positioned to work with West Coast US firms as our time zone is only three to five hours out, which is a great advantage.”

The closure of distributor Red Ant aside, the Australian retail sector hasn’t suffered the same losses as the UK market.

Furthermore, specialists such as EB Games are looking to expand their reach in the country, while superstores are increasing their games offering.

There’s a good mix of retail in Australia, from mass merchants to specialists,” says THQ Asia Pacific sales and marketing manager, Rodney Block.

Aggressive expansion plans continue from the specialists, while JB Hi Fi have invested heavily, and within a short period have captured a lot of market share.”

Despite this, Australia still has many of the retail concerns as the UK. The sheer abundance of new titles means that certain games don’t make it to shelves. New IP also struggles, with certain stores unwilling to take risks, and the rapid erosion of prices is also causing headaches.

The demand for new titles is never greater than day one and this is when games are discounted the most,” bemoans Funtastic’s business manager Gavin Wulfsohn.

Early adopters are not price sensitive so why bastardise the price? New titles are cheaper day one than six weeks after release. This flies in the face of all economic logic.”

Despite financial pressure, gaming in Australia and New Zealand is on the rise. Retailers are surviving and both territories are set to release a wealth of promising new titles this year – which all points to another prosperous 12 months for games down under.

(Statistics combine both New Zealand and Australia market data):

Software market value, 2007: 516 million Euros (23 per cent year-on-year value increase)

Software market value, 2008: 636 million euros (17 per cent year-on-year volume increase)

Xbox 360: 29 per cent of installed base market share, as of end 2008

Wii: 47 per cent of installed base market share, as of end 2008

PS3: 24 per cent of installed base market share, as of end 2008

(Data provided by Screen Digest)

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