The global games business will grow to more than $100 billion by 2017 with Asia Pacific accounting for 49% of sales.
While sales of Microsoft’s Xbox are in decline in Australia with the Company now refusing to release sales numbers new research suggests that the gaming market that is witnessing a surge in PC gaming will witness a boom technology linked toys.
Research Group NPD claims that increased spending on interactive toys and accessories made up for a drop in gaming hardware and software spending.
according to market researcher Newzoo, there will be great turmoil in the market, as mobile games will generate more revenue than consoles and that physical store sales will “evaporate” in 2016, dropping below 20 percent of the market in some Countries.
Last year, global revenues of $75.5 billion exceeded expectations as China and mobile drove huge growth. From 2013 to 2017, the global games market is expected to grow 8.1 percent compound annual growth rate per year to $102.9 billion in 2017.
In the US alone the game industry made $13.1 billion in revenue from new hardware and software sold at retailers, industry-tracking firm The NPD Group reported yesterday.
That matches the $13.1 billion consumers spent in 2014. But that revenue only came in flat because increased spending on interactive toys and accessories made up for a drop in hardware and software spending.
They claim, that “None of this means that PlayStation 4 and Xbox One are floundering” an executive said.
Instead, those systems are making more money while their predecessors’ sales continue to wither.
Hardware generated $4.86 billion in spending in 2015. That is down 4 percent year-over-year from $5.07 billion. Software saw a 2 percent drop from $5.3 billion to $5.17 billion. But sales of toys-to-life products Amiibo, Skylanders, Disney Infinity, and Lego Dimensions helped boost the accessories category by 12 percent from $2.76 billion to $3.1 billion.
And while that might make it look like the industry is merely surviving rather than thriving, that isn’t the case. NPD analyst Liam Calahan explains that the new systems continue to sell far faster than their predecessors.
“After 26 months of sales, the combined cumulative sales of Xbox One and PS4 exceeds the 26-month total of the PS3 and Xbox 360 by 47 percent,” said Callahan. “The lead from the prior generation has expanded, and that’s due to the strong PS4 and Xbox One 2015 holiday.”
To illustrate just how massive a holiday seasons the PS4 and Xbox One had, Callahan points out that those two systems were ahead of the PS3 and Xbox 360 (at this same point in their life cycles) by only 38 percent in October. The lead jumped drastically in November. This is evidence that gamers have not only come into this generation faster than before, but they also continue to do so every month. People are obviously excited about gaming, and they see the PS4 and Xbox One as the best ways to participate.
To elaborate further, Callahan explained why the hardware and software numbers look so grim.
“Annually, hardware sales decreased 4 percent with console and portable sales both decreasing by 4 percent,” he said. “Within consoles, [the PS4, Xbox One, and Wii U] generation of console hardware grew by 2 percent over 2014 while there was a sharp 60 percent drop in [PS3, Xbox 360, and Wii] sales, which led to a net decline of $198 million.”
“For 2015, while overall new physical software dropped by 2 percent, console software increased by 2 percent,” he explained. “Portable software was down 34 percent, with [PS4, Xbox One, and Wii U] software increasing by 52 percent. This offset the decrease of [PS3, Xbox 360, and Wii software, which was down 53 percent. And that led to a net increase of $73 million in physical software sales.” he said.
