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Play dollars keep rolling in

Research commissioned by Australasian games industry organisation IGEA throws some light on consumer spending. While not addressing spend on NZ-developed games, the spending patterns reinforce the message that the local game development industry is on the right track.

Despite or, perhaps, because of the arrival of new generation consoles from PlayStation and Xbox towards the end of 2013, the spend on hardware fell slightly in 2013, although the spend on console games improved strongly.

The NZ consumer spend, just under $300 million in total, split as $133 million of traditional retail sales and $162 million of digital sales. The split of the digital spend was:

  • Mobile games (upfront and in-game purchases): $92 million
  • Digital Downloads (full games and in-game extras): $36 million
  • Subscriptions (console network and MMOG): $22 million
  • Social/Casual games: $12 million

According to the NZ Game Developers Association Chair Stephen Knightly, “100% of games made here are digitally distributed, which makes sense given New Zealand’s remote location.”

Knightly reinforced the benefits of the digital marketplace, noting, “Going digital has created huge opportunities for New Zealand developers. Digital means if we have a hit game then sales aren’t capped.”

New Zealand-made mobile games were downloaded over 130 million times last year and industry earnings grew 86 per cent to $36.3 million in 2012, according to NZ Game Developers Association research.

The freemium model favoured by most NZ mobile game developers also saw strong growth with NZ gamers in 2013. Twice as much was spent on in-game purchases as on buying games.

As both NZ GAV Trust’s Jos Ruffel and Minister Steven Joyce observed in speeches to Animfx last week, there’s been great progress and exponential growth in the NZ industry over the last few years. More encouragingly, there’s no sign of such growth rates slowing.

If there was any bad news in the IGEA report, it was for traditional retailers. Their $133 million take, while hardly insubstantial, represented an 8% drop against 2012 figures. Retailers expect a boost from hardware sales during 2014, as more console gamers upgrade to the PS4 and XboxOne. Faced with ever-increasing numbers of console and PC games available for digital download, any gains from hardware sales could be offset by a drop in software sales.

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