Video games continue to show strong growth in NZ

The last year saw New Zealand’s interactive games industry soar by 18 per cent to a value of NZD$347m off the back of a strong increase in digital sales. While traditional retail purchases remained largely static, showing only a slight softening of 2 per cent to NZD$130m, this was more than offset by a massive 34 per cent jump in digital sales to NZD$217m, according to research released today by the Interactive Games & Entertainment Association (IGEA).

Market data revealed by independent market researcher, NPD Group Australia, showed an upward swing in console hardware and accessory sales, rising 24 and 2 per cent respectively following the 2014 launch of the PlayStation 4 and Microsoft Xbox One. New consoles have shown the highest sales within the first 12 months of launch of any console hardware entering the New Zealand market.

Sales of console software sold through traditional retail outlets slipped 9.3 per cent in relation to the previous year, while digital downloads climbed by 13 per cent to NZD$54m.

The shift to mobile and subscription--based services showed the largest increase, continuing the trend established in previous years. According to research conducted by technology analyst firm, Telsyte, subscription--based services climbed by 41 per cent to NZD$31m, while mobile games and in--app purchases jumped by a staggering 43 per cent to NZD$132m.

"New major console releases and an ongoing shift towards digital sales clearly show New Zealanders continue to be avid consumers of games across a wide variety of platforms," said Mark Goodacre, IGEA’s New Zealand Director. "The strong overall growth of the industry highlights the fact that New Zealanders are exploring a range of ways to purchase video games and hardware, from traditional bricks and mortar stores through to online retailers. New Zealanders are also embracing the new and complimentary ways to play games on mobile and tablet devices."

Foad Fadaghi, Managing Director at Telsyte, pointed towards mobile gaming as driving the industry, followed by digital and subscriptions. "The New Zealand interactive games market continues to driven by the strong uptake of tablet and smartphone gaming, as well as a burgeoning digital download market, which is set to grow substantially to 2019," he said.

Further, Fadaghi predicted that better internet connectivity will further drive a shift towards digital delivery of interactive content and provide opportunities for further gaming innovation.

"Telsyte expects the arrival of Ultra Fast Broadband (UFB) will greatly enhance the digital download market and will usher in a new era of gaming for many New Zealanders, including virtual reality and cloud game services," he said.

Key highlights from NPD Group Australia:

- Growth has been driven by console hardware, which is up 24 per cent on last year. In fact, the new consoles (PS4 and Xbox One) have had the best sales within the first 12 months of launch of any console hardware.

- Console software sales (excludes portable) were $55.9 million in 2014, down 9.3 per cent from last year - however PS4, Xbox One, 3DS and Wii U have experienced growth in software

- 2 new franchises, Destiny and Watch Dogs enter the Top 10 titles sold in 2014

- The PS3 and Xbox 360 continue to contribute a significant amount to the overall software sales

- Originally a digital only game, Minecraft had an extraordinary 2014, increasing in value by 169 per cent, more than double it’s sales in the previous year. Not only was Minecraft well received by 8th Generation gamers, the purchase of Minecraft PC game cards at bricks and mortar stores also increased their value year on year by a blooming 235 per cent.

- Action was the number one genre (volume)

- 59 per cent of all games sold (volume) received an unrestricted Classification

Key highlights from Telsyte:

- The New Zealand mobile (smartphone & tablet) gaming market exceeded NZ$130M, growing by 36 per cent in 2014

- The majority of New Zealand mobile games revenues was generated through in-app purchases

- New Zealanders love their MMOGs (Massive Multiplayer Online Games) which was the fastest growing ‘digital’ category in 2014

- Purchases of online, in-game extras, such as additional levels, missions campaigns and map packs grew over 100% in the second half of 2014, boosted by new titles such as Watch Dogs, Titan Fall, Destiny and Call of Duty.