British consumers spent a record £7 billion on video games last year, according to Ukie’s 2020 Consumer Market Valuation. The lockdown effect and arrival of new game consoles drove a 29.9% year-on-year growth in the market. The arrival of a new console generation, most notably the launches of the Xbox Series S/X and PlayStation 5, pushed console hardware revenues up 74.8% Y-o-Y.
Game software sales across all categories rose 18.5%, from £3.8 billion to £4.55 billion, with digital sales encompassing 85% of all software sales (they grew 21.4% to a record £3.9 billion). Despite many shops being closed for much of the year due to the pandemic, sales of new boxed games grew 7.1% to £646 million, reversing the downward trend of recent years. Games hardware sales had a record year, reaching £2.26 billion, a growth of 60.8% Y-o-Y, thanks to the launch of the new consoles, as well as accessories and PC component sales. PC game hardware, from laptops and graphics cards, to “gaming” mice and controllers, saw a similar major uplift in 2020, increasing 69.7% to £823 million. Relatedly, console game accessories, such as controllers and headsets, experienced sizable increases due to related console hardware sales, up 36.9% to £453 million. VR hardware sales meanwhile grew 29% to £129 million, due in no small part to accessible, standalone headsets such as the Oculus Quest 2. The games sector has also been a driver for jobs. In London, there are currently over 400 job vacancies and nearly 1,800 nationwide. Meanwhile, 25 UK games companies currently have at least 20 open positions, according to figures from the latest UK Games Jobs live update.
The game culture section of the valuation (revenue from activities associated with games) also grew to £199 million, fuelled by a 22.4% increase in toys and merchandising revenue, countering the COVID-related shortfalls in other categories. For the first time, this year’s valuation includes a measurement of streaming and game video content revenues. UK consumers spent £45.6 million through donations and subscriptions, making up for the obvious decline in physical event revenues.
Dr. Jo Twist Obe, CEO of Ukie, said: “The games sector is a growing, resilient and critical part of the UK’s successful creative industries sector. We all know how important entertainment, technology and creativity have been over the last year.”
A POSITIVE TREND ALSO IN GERMANY
According to the latest report from German games industry trade body Game, based on market data from GfK and App Annie, in 2020, the German video games market reached €8.5 billion in revenue (+32% vs. 2019 numbers). Hardware generated €3.2 billion in revenue, a 26% rise year-on-year that includes sales for consoles, gaming PCs and peripherals. Software sales (physical, digital, microtransactions and subscription services) accumulated €5.2 billion in 2020, with progress being particularly important for in-game and in-app purchases. That category alone expanded 44% compared to 2019 and produced €3.2 billion.
Online services saw a 50% increase in sales as well, reaching €692 million, including online services, subscriptions and cloud gaming services. Game noted that subscriptions to individual games such as World of Warcraft and Final Fantasy XIV have been particularly popular, leading to a 44% increase in revenue to €163 million. Looking at full games sales specifically, that generated €1.1 billion in revenue, a 11% rise compared to 2019.
Felix Falk, managing director at Game, commented: “The unusually strong growth in the games market shows how important games were to German consumers during the COVID-19 year 2020. They brought millions of people together, enabled players to explore new worlds despite the travel restrictions, supported home schooling or simply provided a welcome diversion amidst the pandemic.”