People lined up in front of video game shops in their thousands last week in anticipation of the new Call of Duty: Modern Warfare 3 release. With global sales expected to reach $1 billion within weeks, the high-profile launch will boost Australia’s already booming video game industry.
The more than $1 billion a year industry in Australia is experiencing fierce growth amidst a period of economic downturn and while other industries are hurting.
While video game sales decreased in 2010 for the first in the past two years — down 16% — they still amassed $1.7 billion in hardware and boxed software sales. Despite the reduction, video games were still able to eclipse DVD/Blu-ray sales — $1.2 billion – and sales at the box office — $1.1 billion.
“In terms of size it is quite impressive, the game industry has been outranking film for some time,” said Randolph Ramsay, editor of GameSpot Australia.
The $1.7 billion represents sales at retail outlets and does not include online retail sales, downloaded content, online subscriptions and mobile phone games.
Forecasts for 2011 put sales somewhere in the realm of $1.7 billion and are predicted to reach a staggering $2.5 billion in 2014 — 2015. Globally, the video games market is expected to reach $90.1 billion by 2015.
The Australian industry will also grow fast than the global market over the coming years. By 2015 the Australian industry is predicted to have a 9.5% compound annual growth, while the global market will sit at 8.2%.
The growth of the video games industry has been largely attributed to high-profile releases such as Call of Duty: Modern Warfare 3, LA Noire and Uncharted 3. And with video games now the one of the biggest sectors for media entertainment, its progression into mainstream society has been due to a generational influence.
“People started playing games 20-25 years ago when games first started hitting homes around the world,” Ramsay said. “Games have become normalised as the industry grew.”
The average age of video game players in Australia are 32 with 75% of all Australian gamers are aged 18 years or older. What may be startling for some is that 43% of those aged 51 or older are also playing video games.
Thomas Apperley, a lecturer in digital ethnography at Monash University, says part of the appeal of games is the interaction.
“For a lot of people video games are a lot more engaging [than movies] because they respond a lot more to your actions,” he said. “It’s a completely different experience to watching a screen. Multiplayer is a major part of it; the social dimension of a video game is integrated into social media.”
With an established presence, online video games have used the platform to connect players with friends and foes around the world, while also raising further revenue through subscriptions. The internet opened up gaming into a wider sociality — video games have become social practices rather than a hobby, says Apperley.
While the appeal to games is largely associated with computers and consoles such as Nintendo’s Wii, Sony’s PS3 and Microsoft’s Xbox, Australian developers have a large presence on the mobile market. “All the excitement right now is in the mobile space,” said Ramsay. “Australian developers are world leaders when it comes to mobile development.”
There is device for playing games in 92% of all Australian household and of that 43% of households use mobile phones to play games.
Australia has two of the leading mobile developers — Firemint and Halfbrick — developers of Spy Mouse and Fruit Ninja. The mobile phone games market is expected to take almost half a billion dollars in sales by the time the Australia industry reaches $2.5 billion in 2014 — 2015.
Now the advertising industry wants in — players are seeing more in-game ads; Apperley says their inclusion makes games more real because advertising is so predominant in our world.
Indeed, Barack Obama’s 2008 presidential campaign placed ads in specific games to target voters aged 18-34 — the first presidential candidate to use the platform. In Australia, the Transport Accident Commission embedded an advertisement in fast-paced racing game Need for Speed.
In the coming weeks the video games industry will experience an influx of sales, where 50% or more of yearly video game sales is spent over the few weeks before Christmas.