The UK video games market grew to a record £7.16bn in 2021, according to UKIE’s UK Consumer Games Market Valuation 2021.
That’s a new high for the industry, beating last year’s evaluation of £7bn, which was recorded at the height of the COVID-19 pandemic in 2020 – representing a 1.9 per cent increase year on year.
Hardware sales contributed significantly to this growth, growing 17.4 per cent year on year to reach £2.66 bn in 2021. This growth in hardware sales was boosted by a significant increase in the sale of console hardware, reflecting the ongoing impact of the November 2020 launch of the PlayStation 5 and Xbox Series X/S. Console hardware sales grew by 32.9 per cent from 2020, reaching a record £1.13bn.
“2021 was the first full calendar year for Sony’s PS5 and Microsoft’s Xbox Series consoles,” said Dorian Bloch, Senior Client Director at GfK Entertainment. “Both made a huge impact in Q4/20 at launch, with consumer demand outstripping supply, so there is no surprise that this is the best year since the all-time peak back in 2008.
“But we should not forget that Nintendo’s Switch also enjoyed another big year in 2021. This is a fifth year at market for the Switch, which has been rejuvenated and refreshed a number of times since 2017 – most notably with Switch Lite in 2019 and Switch OLED in 2020.”
There was also a significant growth in the VR space. VR hardware sales reached a new high of £183 million, an increase of 41.9 per cent over the 2020 figures.
There was also relatively minor growth in the PC game hardware and console game accessories, which grew 5.89 per cent (£881m) and 2.43 per cent (£464m), respectively.
Despite these increases, there was some areas of decline when compared to the 2020 figures.
The consumer game software market was valued at £4.28bn in 2021, a decline of 6.32 per cent compared to the 2020 figures. However, the market has grown by 11.4 per cent when compared to the revised 2019 figures, when it was valued at £3.84bn.
Digital console game spend fell 5.59 per cent to £1.65bn, while digital PC revenues fell 7.02 per cent to £620m. 2021 was arguably a quieter year for games than 2020, with the lack of big-name releases such as Animal Crossing: New Horizons and The Last of Us Part II. However, UKIE notes that this figure should be seen in the context of software’s impressive performance during the height of the pandemic in 2020.
Physical games also saw a downturn in sales. Both boxed software and pre-owned sales declined significantly compared to the 2020 figures, falling by 20.9 per cent to £511m and 20.8 per cent to £33.8m, respectively. However, the decline is much less pronounced when compared to 2019, suggesting that this downturn is relatively in line with the historical falls in the sector since 2013.
Mobile meanwhile remained stable at £1.46bn, with the market less affected by the lack of new releases in 2021.
Finally, spend on toys and merchandise grew 33.6 per cent to £159 million, with UKIE crediting a large part of this growth to the success of Pokémon merchandise. My shrine of Pokémon toys would agree with that assessment.
“The UK consumer games market has consolidated effectively following significant growth during the COVID-19 pandemic,” commented Dr Jo Twist OBE, CEO of UKIE. “The UK is a nation that loves its video games and we should be proud of the positive contribution this sector makes to the economy, to our culture and to wider society.”