Covid pushes UK video game market to record £7bn – but game sales are falling | Spell

The UK video game market hit a new all-time high of £7.16 billion last year as the pandemic continued to fuel an unprecedented boom in home entertainment, with gamers rushing to stock up on new consoles and virtual reality kits, even as total game sales fell.

The lockdown conditions have made gaming one of the biggest pandemic winners, with the UK market now worth a third higher than in 2019 before the coronavirus crisis hit and worth more than the music and video streaming markets combined.

The amount spent by gaming fans – on everything from new consoles, software and mobile games to themed events, toys and magazines – grew 1.9% year over year, beating expectations the market would slide after the gold rush of gaming at the height of the pandemic in 2020.

Role playing in Grand Theft Auto V. Photo: Rockstar Games

The overall market rose despite a 6.3% drop in video game software sales to £4.28 billion, with the most popular titles including Electronic Arts’ Fifa 22, Activision Blizzard’s Call of Duty: Vanguard and Take-Two Interactive’s Grand Theft Auto V.

“The main story here is how much of the lockdown-related boost we’ve seen in 2020 has been successfully held during the ‘correction year’ of 2021,” said Steven Bailey, senior analyst at Omdia.

The attractiveness of the gaming market – worth nearly £1.8bn more annually than in 2019 – has fueled a wave of consolidation with US and Chinese gaming companies that have spent more than £2bn on UK video game makers over the past two years.

Growth in the market last year was supported by continued strong demand from gamers for new consoles, the PlayStation 5, Xbox Series X/S and more recently the Nintendo Switch OLED edition, which grew by a third to £1.13 billion. .

There was also significant growth in virtual reality hardware, such as headsets, with sales up 42% to £183 million as gamers increasingly embrace new technologies.

Mobile games revenues maintained pandemic lockdown levels and held steady at £1.46 billion, while licensed toys and merchandise grew 34% to £159 million, thanks in large part to Pokemon’s popularity.

“The UK is a country that loves its video games and we should be proud of the positive contribution this sector makes to the economy, our culture and wider society,” said Jo Twist, chief executive of UK gaming organization Ukie , which publishes the annual report.

The video game lockdown boom has fueled a wave of consolidation with the success of UK game makers, making the UK a prime target of foreign buyers with deep pockets.

In December 2020, California-based EA paid £945 million for Southam, England, UK-based Codemasters, the maker of the Formula 1 series of racing games.

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Six months later, China’s Tencent paid £919 million for Sheffield-based London-listed video game developer Sumo Group.

And in March last year, Epic, creator of global hit Fortnite, acquired UK-based Mediatonic, creator of lockdown hit Fall Guys.

In January, Microsoft topped off its latest round of consolidation with a $70 billion (£53 billion) deal to buy Activision Blizzard, the publisher of mega franchises including Call of Duty, World of Warcraft, and Candy Crush, in its biggest deal ever and the largest — ever takeover in the tech and gaming sectors.

Top 10 Selling Video Games in the UK in 2021 (Physical and Digital Copies Combined)

  1. FIFA 22

  2. Grand Theft Auto V

  3. FIFA 21

  4. Mario Kart 8 Deluxe

  5. Call of Duty: Black Ops Cold War

  6. Spider-Man: Miles Morales

  7. Animal Crossing: New Horizons

  8. Minecraft

  9. Red Dead Redemption 2

Source: Entertainment Retailers Association

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