UK games market down 7.8% in Q1

It was meant to be the Q1 that would save us from the slump, but a wash of quality releases have not been able to halt a games market decline.

MCV research based on GfK Chart-Track data shows that the UK games market was worth 303m for the 13 weeks ending April 4th, 2010.

That is a fall of 7.8 per cent when compared with the 329m earned during the comparable period last year.
In terms of units, the number of games sold was down from 15.38m in 2009 to 13.79m in 2010 – a drop of 10.8 per cent.

The results are disappointing for retailers, who were expecting a sales surge this Q1, driven by a blockbuster line-up on games.

A number of factors – including poor weather, weak demand for Wii, and a fall in consumer spending – have knocked the market.

It’s frustrating when you consider the quality of product that’s out there,” said HMV’s head of games Tim Ellis.

It shows the impact of the economic downturn. People are making fewer impulse purchases, whilst the market is also having to compete with other popular culture categories such as technology devices, licensed products and artist merchandising.

Even things like gigs and festivals – if people are spending twice as much on this than they did five years ago then this represents disposal income that’s heading in a different direction.

Mass Effect 2, BioShock 2, Aliens vs Predator, Battlefield: Bad Company 2, Final Fantasy XIII, Just Cause 2 and Pokmon have all hit shelves since January – there was even a new hardware launch in the form of Nintendo’s DSi XL.

That line-up outnumbers 2009’s Q1 release slate – which included the likes of Killzone 2 and Resident Evil 5 – but just hasn’t been enough to buck a downward trend.

Morrisons games buyer Jon Biggs added: My belief is this year will continue to be tough across the market. Firstly we had the January and February consumer credit card spending hangover from Christmas, then we have the uncertainty of the economy added to questions over the future government and how that will effect the individual in terms of taxation. The consumer is worried.”

The UK trade is now looking towards Q4 to halt the decline. Three new hardware launches are expected this Christmas – PlayStation Move, Project Natal and Nintendo’s 3DS. And that’s on top of a hopefully promising software line-up that includes Halo: Reach, Fable III and Gran Turismo 5.

There is already a lot of anticipation around Natal and Move and along with 3DS these products will help to broaden gaming to an even wider audience this Christmas,” commented DSGi category manager for games, Peter Willis.

The Hut’s Sarah Jasper added: We look forward to the mass market frenzy we expect to be generated by the new hardwares across all formats, and have already started planning for Christmas.”

Meanwhile, Grainger Games is banking on the arrival of Natal and Move generating as much excitement as new console launches: There is definitely a positive buzz at Grainger about Q4. We expect Natal and Move to encourage an uplift in console sales,” said sales director Phil Moore.