Jules Williams, consumer retail analyst at Kantar Worldpanel, discusses the annual summer slowdown in games sales and the opportunities for growth...
Summer is well and truly upon us, with most of the UK basking in the first welcome rays of sunshine. The games industry, meanwhile, is prepared to sit beneath its traditional dark cloud as it enters its yearly quiet period.
The summer has always been the least important time of year for games, accounting for only 12 per cent of yearly spend. One of the main reasons for this is that big titles just aren't released at this time of year. Blockbuster titles tend to launch around Christmas period, with two thirds of all revenue in December coming from people who buy games as a gift. This contrasts with only 19 per cents spent on gifts during August.
But it isn't simply a lack of new blockbuster titles that accounts for the fall in sales. Last summer, sales of catalogue games, those which have been on the shelves for three months or more, fell by 23 per cent.
These are games that should, in theory at least, sell equally well across the year. The fact that they fall over the summer is an indication that fewer people are shopping for games. Even the most dedicated gamers, those who buy seven or more titles each year, tend to stay away from buying games during the summer – only one in three did last year.
But even within a quiet market there are opportunities for both publishers and retailers.
"For retailers, this presents a clear
opportunity. Console penetration in
Britain is higher than ever before,
with 62 per cent of all households
owning one. And there is a strong
inventory of older games, which
consumers may still look to buy."
A number of industry commentators have voiced concerns that the arrival of the next-gen consoles will bring the games industry grinding to a halt. The fear that gamers will start hoarding their spending money in anticipation of the PS4 or Xbox One.
But for the many gamers there won't be an opportunity to enjoy the new consoles until the end of this year at the earliest, meaning gamers may look to buy existing titles to tide them over until then.
For retailers, this presents a clear opportunity. Console penetration in Britain is higher than ever before, with 62 per cent of all households owning one. And there is a strong inventory of older games, which consumers may still look to buy.
Shops may want to push the message that console owners need to experience the ‘greatest hits' for low prices, before the next generation arrives.
Summer presents publishers with an opportunity to have their moment in the spotlight.
A top-quality title which is given rave reviews can become the talking point of the entire games market for months. Take Batman Arkham Asylum as an example. The action title launched in August 2009 and received top reviews from critics. As a result it became the seventh bestselling title of the year.
The Last of Us is a likely repeat contender this year. The game is the only strong release in what looks like an uninspiring summer period.
This year's releases have every chance of performing well and will demonstrate why a summer launch can be beneficial under the right circumstances. And the more that these success stories happen, the less publishers will avoid releasing quality titles at this time of year.
With any luck, successful summer launches will become an annual event and help boost the market when it needs it most.