GfK expects gaming to boom again in 2006

By James Wells

SYDNEY: Statistics released today by GfK show the Australian gaming market is on the cusp of a boom with the release of Microsoft Xbox 360 console later this month and the Sony PlayStation3 scheduled for release in Australia prior to Christmas.

The expected boom from consoles in 2006 follows strong sales of handheld gaming devices including the Sony PlayStation Portable and Nintendo DS in 2005.

Handheld gaming products have helped lift the category overall, following substantial discounting in the static console software category.

According to GfK senior account manager – interactive entertainment, Daniel Morse, the handheld and console gaming market in Australia, excluding PC gaming, grew by five per cent to $734 million in 2005 and further growth is expected this year. Of these sales, software represented 63 per cent of the value, while hardware represented 37 per cent of dollars spent in the category.

Measurement of the 2005 calendar year by GfK, finished on 3 January 2006, and includes all key retail selling periods including Boxing Day and a large proportion of post-Christmas sales.

The Sony PlayStation Portable helped increase sales in the handheld gaming category by 134 per cent to $188 million in 2005. The number of units increased 88 per cent to 2.1 million pieces which represented 20 per cent of the volume in the category.

“Strong sales of both the Nintendo DS and PSP have been responsible for the growth in the handheld category,” said Morse.

Other handheld gaming products include the Nintendo Game Boy and Game Boy Advance.

Sales in the static console segment have fallen by one per cent over the last 12 months from 8.9 million units to 8.8 million units.

The value in the static console segment declined by 12 per cent to $546 million, which was caused by heavy discounting, particularly during mid-year sales which are driven by advertising in toy catalogues from major retailers.

“It was a good year across all formats and publishers – the interactive entertainment market is continuing to exceed expectations,” said Morse.

“We have the Xbox 360 launch in two a half weeks. It is an exciting time for the industry – the start of a new generation of consoles. Retailers should not ignore the current consoles, as they will do well into the future. I don’t expect consoles such as the PlayStation 2 and Microsoft Xbox to stop selling, but I will expect to see strong support for the new consoles right from day one.

“The message to get to retailers is that even though we are coming to the end of a generational lifecycle for consoles, the PS2 and Xbox still have strong first and third party software support and I would expect to see them continue to sell well over the next couple of years.”

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