The Australian gaming market is starting to wobble as sales across the ball fall as consumers get back to work, questions are also being asked about the future for console gaming.
Researchers estimate that the gaming market in Australia is around 16.5M players with over 40% female gamers, the average selling price of a gaming PC is between $2,500 and $3,000 according to retailers.
On average a gamer is spending over 80 minutes a day gaming with several key streaming brands now moving to include access to games alongside their movie and TV Show offering.
Recently Netflix declared that their move to delivering gaming on mobiles had been an enormous success.
Now gaming is starting to slow after being given a kick along by COVID with observers trying to work out where the industry is set to go.
When the pandemic was declared in March of 2020 gaming sales grew according to NPD Group research delivering 13 straight months of double-digit year-on-year growth.
Now the tables have turned with NPD Group reporting that spending on gaming this year, up until May 2022 is down 19% year-over-year.
Gaming gear retailers in Australia were told late last year by games publishers to expect a slowdown once pandemic restrictions were relaxed, and people started returning to the habits and hobbies they were unable to pursue in lockdown.
Even then, they were optimistic that the industry would wind up in a stronger place than it had been before the pandemic, with companies like Take-Two predicting they would retain a sizeable chunk of the increased engagement from the pandemic.
Despite this, Activision’s monthly active users for the first quarter of 2022, was the lowest number since the free-to-play Call of Duty Mobile launch in 2019.
Online site Gaming Industry reports that ‘The pandemic boost is wearing off, but I suspect there’s a bit further to fall before we hit anything approaching a new normal. For one thing, there’s not much in the way of reinforcements coming’.
They claim that an underwhelming series of 2022 showcase events didn’t provide too much optimism for the rest of 2022 either, although it’s worth noting that Nintendo and Sony didn’t exactly give anything away on what they were planning for the second half of the year.
And then there’s the inconvenient fact that the pandemic is not actually over, and that has ramifications not just for customer habits but for the supply chain. Xbox CFO Tim Stuart told investors this week that recent lockdowns in China have the company expecting to see supply chain problems until at least next year.
The big question now is if Australia is heading to a recession will Australians return to gaming instead of spending their disposable dollar on entertaining and travel.
“The entertainment industry is not counter-cyclical despite what people say. After the ’08 financial crisis we suffered, our competitors suffered, our numbers suffered, and we don’t wish it on anyone.” – Take-Two’s Strauss Zelnick, said considering what happened in 2011 after the GFC.
Analysts claim that the console and PC space has a dearth of obvious needle movers in the months ahead, mobile has been flagging as well — the NPD’s mobile partner Sensor Tower reported consumer spending on Google Play down 23% year-over-year in May — and macroeconomic conditions aren’t looking too favourable for the near- and medium-term.
GamingIndustry reports that spending on games is still well above pre-pandemic levels, as the NPD Group’s Mat Piscatella pointed out on Twitter, but it’s clear the industry is giving back some of the initial pandemic boost. What’s less clear is how much further it has to fall, and how much of that boost it can hold onto for the long term.
With consoles such as the Sony PS5 and the Microsoft Xbox still hard to buy several insiders are predicting that console gaming is “dead”, this was being said back in 2012.
David Jaffe, game director on 2005’s God of War said recently “Look, consoles are going away. I think in ten years — probably sooner, but ten years is always the safe thing to say so you don’t sound like an idiot — but here’s what I’ll say: I’ll go on the record and say that the next generation of hardware will be the last consoles. And they should be.”
Several observers have claimed that the Sony PS5 is at heart not that different from the PS3 — we connect it to a monitor and buy discs or download games from first- and third-party publishers to play on it — the console market itself had changed pretty drastically since 2012.
For one thing, platform holders’ walled gardens are increasingly growing onto each other’s lots. Players on one console platform can compete with those on another, or with PC players and mobile players. Sony is bringing many of its first-party exclusives to PC, and published MLB The Show 21 and 22 on Xbox and released them both into Game Pass on day one.
Microsoft has put Minecraft on everything and released indie-developed hits like Cuphead and Ori and the Blind Forest on Switch. Nintendo — perhaps the most stubborn of the companies when it comes to releasing its products on platforms it doesn’t own — caved to investor pressure at a financial low point in 2015 and started making mobile games.
The console libraries are also becoming less important, as the exclusive third-party games that used to tilt previous console generations have become exceedingly rare, and multi-platform ports for big games are more or less assumed (provided the hardware is powerful enough to manage them).
The lowering of barriers to indie developers also means the big three platforms are awash in more new original content than any player could possibly enjoy in a single lifetime, so every system is a firehose of entertainment for people to drink from.
And then there’s on-demand cloud streaming, which was what prompted so many of the “consoles are dead” predictions in 2012 to start with.
