LGC 2010: New consoles wont save market slump

A fresh trio of game consoles released in the next few years won’t be enough to stop a seven-year slump in the games market, a leading games analyst has said.

Screen Digest chief analyst Ben Keen said the game industry faced structural challenges”, with the UK sales not expected to hit 2008 levels until 2015.

New consoles, which he predicted would arrive from late 2012, would still not push the market to its record GBP2.5 billion spending levels set in 2008.

If it weren’t for the rise of the digital and social market, he said, the situation would be much worse.

We are really at a tipping point here,” he told a packed audience at this year’s London Games Conference.

Packaged goods will decline and the online and mobile market will – more or less – fill the void, he said. Over a fifth of revenues in the next five years will come from digital and online sales.

The overall decline will remain for many reasons, from a cyclical hardware decline, to piracy, to the rise of the pre-owned market and the growth of social.

We’re in a risk-reward business, he added, and the risk is growing fast.

A report published in February concluded that the world’s three biggest games retail markets together fell by eight per cent.