According to the Entertainment Retailers Association (ERA), the UK video games market declined 17.4% to £1.598bn in 2012 (both physical and digital sales).
Physical game sales which accounted for 65.4% of the market fell 26.4% to £1.05 billion, down from 73.5% the year prior. Digital sales grew, but only by 7.7% to £552.2 million and not enough to bolster lagging industry sales.
Music was down just 5.5% and video 10%. The overall entertainment market decline was 12%, with games very much standing out as the worst performer.
From the ERA report:
“The combination of a myriad of exciting new devices and compelling new digital retailing services is clearly exciting consumers,” ERA director general Kim Bayley stated. “What is most striking is that these figures do not even include the impact of streaming services like Spotify, Deezer, We7 and Rdio, for whom full market value data is not yet available.
“Despite digital’s seemingly inexorable growth, the CD, the DVD and the physical games disc show incredible resilience. It is nearly nine years since iTunes launched in the UK yet over 60 per cent of music sales are still accounted for by physical formats. It is clearly way too soon to write off the CD and in video, digital barely gets a look in. Physical formats still account for three quarters of the entertainment market.
“The dearth of attractive releases during summer 2012 was clearly a significant factor. Suppliers need to do more to rebalance their release schedules and improve the quality of their releases. No retailer can afford to pay overheads on a store for 52 weeks of the year if all the key releases are going to be concentrated in the last quarter.
“And entrepreneurs will think twice about investing in new digital services if releases fail to excite the public. Luckily the message appears to be getting through and we look forward to being able to offer the public a much better release slate in 2013.”
Finally, the ERA stated that physical accounted for 75.5% of the *total* entertainment market sales in all sectors (music, games, DVDs) compared to 80.6% in 2011.
What are thoughts, are physical games coming to an end?
