Games Vie with Video as UK’s Top-Grossing Home Entertainment Segment: Report

March 23, 2012 · Posted in M&E Daily, Today's M&E Connections 

by Terence Keegan

Sales of video games in the United Kingdom overtook sales of DVDs, Blu-ray discs, and digital video products for the first time in 2011 to be the country’s lead home entertainment segment, according to the UK-based Entertainment Retailers Association trade group (ERA).

Total sales of video games in the UK during 2011 — including console games, PC games, digital downloads, and apps — topped £1.9 billion (approximately $3.1 billion), ahead of video sales of £1.8 billion ($2.9 billion) and music sales of £1.1 billion ($1.8 billion).

Overall sales of games, video and music products declined in value by 3.3 percent in 2011 to £4.8 billion ($7.6 billion).

Indeed, the overall market decline — as well as the shift to digital distribution — likely exacerbated the financial pressures on UK-based video game retailer Game Group, which filed for administration earlier this week (more at BBC).

In the first 11 weeks of 2012, sales of video on physical formats have been worth more than twice those of games in the UK; even with the addition of digital products, video remains ahead, the ERA reports.

Among physical formats, Blu-ray discs and Xbox 360 games posted notable annual revenue gains in 2011, with Blu-ray sales up by 18.5 percent and games for the Xbox 360 up by 3.3 percent.

Online and mobile delivery now accounts for 31 percent of the UK’s music market, 26 percent of the games market, and 5.4 percent of the video market, according to the trade group.

The ERA’s research echoes similar findings by global video game market tracker NPD. On Thursday, NPD reported that fourth-quarter 2011 consumer spending on gaming content across the United States and Europe’s largest video game markets (the UK, France, and Germany) via all monetization methods outside of new physical retail sales totaled $3.3 billion. (NPD’s data, however, is not exclusively digital; it includes sales of used video game discs as well as disc rentals.)

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