2020 is a great year for video games and consoles market
The market of video games and consoles is again growing this year in the UK and probably overall. Many factors are in play with new releases, in-app purchases models etc. As some of you are gamers themselves or just interested in the gaming industry, here are some interesting elements recently published by Mintel.
Mintel commissioned consumer research among 2,000 internet users aged 16+ in June 2020. And thanks to this latest research, we can see that 2020 has been a bumper year for the video games and consoles* market with sales set to reach an estimated £1.8 billion in 2020, an increase of 55% since 2019 when they were worth £1.2 billion. By 2021, the market is forecast to top the £2 billion mark.
The research also tells us a few notable items
- Upgrades are the way to go: Overall ownership of static** consoles (40%) stayed the same since 2019. However, just over half (52%) of these owners say they will upgrade to the next-generation consoles. Almost a quarter (24%) of those intending to upgrade will do so within the first six months of release, while 28% say they will do so after the first six months. This prolonged period of purchase intent points towards the potential for continued sales success during and after summer 2021.
- The first lockdown provided a jump in gaming usage: while the market has traditionally relied on console launches to boost its way out of yearly declines, lockdown 1.0 has already provided a significant jump in gaming usage. Some 61% of consumers who use their console for streaming media from platforms like Netflix did this more often after the COVID-19 outbreak. Meanwhile, 36% of those who use their console for buying games online did this more frequently too. The success of social gaming is highlighted by the fact that half (51%) of console owners prefer to game with friends than alone, rising to 57% of Younger Millennials and 67% of Generation Z*** consumers.
- Gamers tried to reduce their game time pre-COVID19: While many Brits have been glued to their devices for much of the year, prior to COVID-19, a third (34%) of console owners had been trying to reduce the time they spend playing console games. And it’s not just the addictive nature of gaming that is cause for concern; three in ten (31%) of these owners regularly buy in-game content, which includes ‘loot boxes’, rising 44% of Younger Millennials.
Zach Emmanuel, Mintel Technology Analyst, commented the study: “COVID-19 has had a monumental impact on the sales of video games and consoles as Brits looked to stay entertained at home. While consumers’ concerns over finances are expected to have led to a decrease in purchases of technology products overall, it has not been the case for consoles. The market has already benefited from the introduction of the new Nintendo Switch Lite in the first half of the year and the recently launched Xbox Series X, and the upcoming PS5 will provide a further boost to the market.
Xbox has also enabled gamers to have greater flexibility over how they play, with the introduction of its new cloud gaming service**** which gives subscribers access to over a 100 games for a monthly subscription. However, Xbox is positioning cloud gaming as an alternative and not a replacement for a console. Our data shows that 26% of people use consoles would prefer to play games over an internet connection than use a console - highlighting the appeal of Xbox’s new service. Looking more long-term, the continued roll-out of 5G will make it possible for consumers to reliably use cloud gaming on-the-go, away from their console.
The fact that a third of console owners were interested in reducing the time they spent playing console games pre-pandemic indicates the importance for gaming developers to show that the wellbeing of their users is a priority. Companies incorporating warning messages in the game’s description and adding spending caps can help to address some of the concerns.”
* This covers hardware sales of static consoles (e.g. PlayStation 5), hybrid consoles (Nintendo Switch) and portable consoles (e.g. Nintendo 3DS) and sales of games on these devices.
** These devices are designed to play at home, and not on the move.
*** Younger Millennials aged 24-30; Generation Z are 23 and under.
**** This refers to playing video games over an internet connection, without downloading or installing the game itself. Xbox’s cloud gaming service can be played on Android smartphones and tablets.GamingMintelStudyMarket Data