This article was first printed in the GamesIndustry.biz UK Retail and Publishing Briefing. To receive these special emails, sign up here.
March is now upon us, which means the days are getting longer, the sun is beginning to emerge and - of course - the Entertainment Retailers Association's annual yearbook is here.
The focus from ERA's data this year has been on Access vs Ownership, which isn't quite so applicable to us in the games industry. For those that don't know what 'Access vs Ownership' relates to, it's the phenomenon of consumers no-longer buying products outright (either as downloads or in physical form) and instead opting to simply access the experience for a small fee or monthly subscription.
According to ERA, 51.3% of UK consumers now choose to 'access' movies, music and games as opposed to 'owning' them. This speaks to the growing popularity of Apple Music, Spotify, Netflix and Amazon Prime... and so it doesn't directly relate to us. Of course, we've seen this trend manifest itself in different ways via the free-to-play model and online subscriptions, but the concept has yet to be adopted for major AAA releases. Perhaps the recently announced Xbox Game Pass will change that.
But there were a fair few other stats and interesting pieces of information that speak to the evolving nature of the physical games market in the UK.
Here are my takeaways:
- Supermarkets are under pressure. There were three additional UK supermarkets that sold physical games in 2016 versus 2015 - bringing the store count to 3,993. However, the likes of Asda, Tesco, Sainsbury's and Morrisons saw their share of the boxed games market shrink by 1.3% - dropping to 24.3%. It follows a slight drop of 0.3% between 2014 and 2015.
Why? Well supermarkets are becoming less aggressive in games. Boxed games are declining, so therefore space in these supermarkets is being given over to other sectors. Supermarkets are also no-longer loss-leading anywhere near as much as they used to. In fact, a remarkable statistic is that the average price of games at grocers is higher than at any other store type - a complete reversal from just two years ago. Specialist, generalists and independents (historically the most expensive places to buy games) charge (on average) £33.17 per game (a drop of 1.9% year-on-year), whereas supermarkets are charging £33.54 (up by 3.1%).
"Boxed games are declining, so therefore space in these supermarkets is being given over to other sectors"
- Overall, boxed game prices year-on-year remain pretty much flat. The average UK price of games is £32.64, a slight drop of 6p year-on-year.
- Now, this statement will shock nobody: consumers are shopping more online. Boxed marketshare for online retailers now sits at 36% and is closing in on 'over the counter' - which now has a market share of just under 40%. Of course every retailer sells online, so this isn't bad news for anyone in particular. However, the anecdotal complaints around the Switch launch suggest that some retailers really need to improve their web offerings - especially if this is where their consumers are choosing to buy.
The cheapest place to buy games remains online, with the likes of Amazon selling games for an average price of £31.51.
- There are 23 fewer shops selling boxed games in the UK. Not exactly anything to panic about. In fact, with 6,586 retailers stocking titles, the number is still far higher than 2014 (when it was 5,272). However, most of the loss in shops come from the High Street. There were actually more supermarkets and 'general multiples' that sold games, while the number of specialists (GAME), CD and DVD stores (HMV) and electrical stores (PC World) that sold games dropped by 48 shops in 2016 vs 2015.
"There were 585 new boxed titles released in 2016, down 7.1%"
- ERA has also revealed the amount of money generate from software sales in the UK across individual consoles during 2016. The No.1 machine is (unsurprisingly) PS4 with £374.2m made from boxed game sales in 2016 - a drop of 3.1% year-on-year. No.2 is Xbox One with £281.6m in software sales (a drop of 11%), while No.3 was 3DS with £46.9m - 3DS was the only games console to sell more games in 2016 vs 2015 (up 36.7%). Xbox 360 games generated £25.6m, Wii U games made £16.4m, and PS3 took just £14.1m.
- Meanwhile, the number of new boxed games being released dropped once again. There were 585 new boxed titles released in 2016, down 7.1% from the 630 released in 2015 (which was a drop on the 696 released in 2014).
- As for the top games, ERA reveals there were three games that sold over 1m copies in 2016: FIFA 17 (2.5m), Call of Duty: Infinite Warfare (1.3m) and Battlefield 1 (1.06m).
ERA data is quoting figures from GfK.
For a lot more information, including IHS analysis on VR and digital, contact ERA's Steve Redmond.