The UK games market broke the £5bn sales mark for the first-time last year as Nintendo’s new hybrid Switch console boomed and virtual reality headsets flew off the shelves.
Gaming fans forked out £5.11bn on consoles, games, hardware such as headsets and attending events – a 12.4% year-on-year rise – as the sector defied a wider downturn in consumer spending.
Trade body Ukie said that there has been a “renaissance” in games consoles as Nintendo’s hybrid home console-meets-handheld device proved as popular in the UK as it has globally. Console sales, including the PS4 Pro and Xbox One X, grew 30% to £659m, reversing a sales decline since 2014.
“It is clear that the console gaming market is now enjoying a renaissance,” said Dorian Bloch, director, entertainment at GfK. “Nintendo’s Switch has enjoyed the best [sales] start for a Nintendo home console since the mighty Wii back in 2006.”
The virtual reality craze continues to make its way into the mainstream with fans spending more than £100m on headsets for the first time, a 23.5% year-on-year rise. This went hand-in-hand with a surge in demand for greater graphics processing power to create VR experiences and worlds, sending PC game hardware sales soaring 51% to £376m.
“Gamers are serious when it comes to acquiring state of the art equipment to fuel a premium gaming experience,” said Bloch.
Games software remains the largest part of the market, with overall sales rising 8.3% to a new high of £3.56bn. The shift from traditional boxed games to digital continues to gather pace, as the games industry shows the same signs of the transition that has impacted other entertainment sectors such as music.
Digital and online PC and console revenues rose 13.4% year-on-year to £1.6bn. The mobile market also rose significantly, up 7.8% to £1.07bn.
However, UK gamers’ addiction to blockbuster titles such as Call of Duty helped sales of new boxed software buck the downward trend, rising 3.1% to £790m.
“While the rise of free-to-play business models has broadened the gaming audience, players in the UK are especially willing to pay upfront for major titles like Call of Duty: WWII and PlayerUnknown’s Battlegrounds,” said Carter Rogers, senior analyst at SuperData Research.
Rogers said major console games and premium PC titles were the drivers of 42% of digital games revenue. This is greater than gamers in Europe (34%) or worldwide (14%).
Sales of new physical and digital games helped drive down the second-hand market 15% to £101m.
The report shows that gamers seek to take their passion beyond screen into the real world. They attended events in record numbers. Major expos such as EGX and Insomnia, as well as eSports fuelled a 13.4% rise in ticket sales to £8.4m.
Spending on game-related toys and merchandising rose 6.8% to £72.9m. This has defied decline in the general toys market, which has recently claimed Toys R US.
The Ukie said this was because there was “stronger game representation in cinema” in 2016, which included Angry Birds and Warcraft films, compared with last year which saw Michael Fassbender’s Assassin’s Creed and the latest Resident Evil released.
“It’s been another year of growth for the games industry,” said Jo Twist, chief executive of Ukie. “New hardware such as the Switch have driven retail sales, VR hardware looks healthy and digital games across all platforms continue to grow.”
