UK video game sales dip for the first time in 7 years

While video games remain the UK’s biggest entertainment sector – almost doubling the revenue generated in video and music combined – in 2019 the sector shrunk for the first time in seven years.

In a report by the Entertainment Retail Association (ERA), the video game sector reportedly saw profits dip by 3.4 per cent to £3.77bn – the industry’s first year without growth since 2012. 

“The reason for the stumble was the inevitable slowdown in sales ahead of the expected launch in late 2020 of the new PlayStation and Xbox consoles,” the ERA posits. “The last such downturn came ahead of the launch of the current generation of Sony and Microsoft consoles in 2013.”

In a press statement, ERA CEO Kim Bayley said: “The key message from the games business in 2019 is we need those two new consoles from PlayStation and Xbox – and soon.”

Once again, this analysis also indicates a shift in consumer spending from physical to digital sales, with expenditure on physical games software declining 21.7 per cent in 2019 to £602.5m. Spending on online and mobile gaming, however, increased 1.1 per cent to £3.17bn.

It’s not all bad news, however; looking back over the decade, the ERA calculates that overall, the video game industry has seen revenue climb 76 per cent since 2010.

In related news, despite a 25 per cent dip in revenue over the year, Fortnite was 2019’s most successful game for the second successive year, netting $1.8bn (£1.38bn) revenue across the period.

In a report which focused on “the health of digital games and interactive media market, breakout moments of 2019 and top trends going into 2020”,  the analysts said the 25 per cent dip from the $2.4bn (£1.84bn) generated in 2018 intimated the free-to-play game’s revenues were stabilising after its incredible rise to popularity.

The report also revealed that free-to-play games accounted for four out of every five dollars spent on digital games in 2019 – that’s 80 per cent of all digital games revenue – and platform exclusivity deals “distributed top gaming video content creators”. XR revenue – which includes VR and AR technology – also saw a boost, climbing 26 per cent to $6.3 billion (£4.8bn) in 2019, and the games and interactive media industry itself grew 4 per cent on last year “with few market movers”.

About Vikki Blake

It took 15 years of civil service monotony for Vikki to crack and switch to writing about games. She has since become an experienced reporter and critic working with a number of specialist and mainstream outlets in both the UK and beyond, including Eurogamer, GamesRadar+, IGN, MTV, and Variety.

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