The UK games market has plummeted to its lowest levels in three years, with a severe decline in the casual market.
According to Chart-Track, the overall UK games market has fallen 16 per cent in sales for the first half of 2010. The market was worth 963 million for the first 26 weeks of the year, down from 1.143 billion in 2009.
Software sales in particular were down ten per cent to 533 million, while hardware sales have collapsed 32 per cent – from 378 million in 2009 to 256 million this year.
Handheld consoles sales suffered the biggest fall, down 40 per cent from 119 million to 72 million.
But it wasn't all bad news. Xbox 360 software sales were up 18 per cent to 169 million, while PS3 game sales increased by 23 per cent to 141 million.
Analysts have told MCV they believe the casual consumers have moved on from boxed product and towards free-to-play online gaming.
The casual element of the boxed product market that we loved five years ago has moved on,” said Parker Consulting founder Nick Parker.
The casual gamers have moved to look at what they can get for free online. All that leaves is the core element of gaming and the key sellers this year have all been core games.
The whole situation is a bit frightening for the long-term packaged goods market.”
Despite the sales fall, retail is hopeful that Q4 can spark a turnaround in fortunes for the UK games industry.
HMV's head of games Tim Ellis said: There are lots of exciting developments around hardware products coming out in Q4, or which are out soon but are likely to have a significant impact on the Christmas gifting period.”
THQ's marketing director Jon Rooke added: Kinect and Move will reinvigorate the market. I'm absolutely confident that we'll see the market come back towards the end of the year. The Wii is a platform that tends to bounce back during the last quarter of the year, and I'm sure everyone will be buying a bucketload of hardware and software this Christmas.”