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Australian video game market driven by the popularity of digital downloads

Industry Sector

Leisure

Published

7 January 2013

Author

Alex De Angelis

Type of News

Market

The Australian video game market was once viewed as a fad for teens, however video games have defied doubters and become an established part of the entertainment scene. Those teens grew up and continue to play games with the same enthusiasm as they did decades ago. All the while, new generations of Australians are joining in on the fun.

As a result, the industry is grew at a healthy rate of 4.1% per annum over the five years through 2011-12. Revenue grew by 20.6% in 2008-09 alone, comprehensively shaking off fears that the recession would slow demand. This included a 38.7% increase in retail spending on games and consoles.

As of 2012, the video game industry in Australia was worth $1.45 billion. There are 21.8 million gamers in Australia and they spend an average of 11 hours a week playing games. Australian's spend most time gaming on mobile devices, followed by PC/Mac games.

While sales in traditional bricks and mortar retail have taken a slight dip, and still represents the lion's share of the games industry, the popularity of digital downloads, online game subscriptions and in-game purchases all point to growth.

The nation's game industry emerged in the late 1980s and experienced significant growth in the next decade-and-a-half, with the establishment of many game development studios.

These studios were located mainly in Brisbane and Melbourne. They included (in Brisbane) studios such as Auran (1995),Wildfire Studios (1995), Krome Studios (1999), Pandemic Studios (2000) and Halfbrick Studios. In Melbourne they included Torus Games (1994), Tantalus Interactive (1994), and Blue Tongue (1995).Australian video games

But the past few years haven't been great for the industry, with several pioneer studios in Brisbane, Melbourne and Sydney closing their doors. Among these are Pandemic Studios in Brisbane, which closed in 2009, Krome Studios, which closed in 2010, and THQ's Brisbane and Melbourne studios, which shut down in 2011.

In November 2012 it was announced that Australia would invest $20 million over three years in to the video game industry through an Interactive Games Fund. The fund is intended to assist the sector to reclaim its competitive advantage and support the development of games in Australia, and give the market a stronger position internationally.

While there are obviously plenty of opportunities to develop a sustainable video game market in Australia, the key appears to be an ongoing dialogue between industry and policy advisors at a state level.

The Australian game industry should "play" with its strengths (local talent, proximity to the Asian market, expertise in online gaming and mobile games, competitive university programs in computer programs, etcetera). It needs to make the move from being a "contender" to being an international hub for the video game market.

For more information on the Australian video game market, see the latest research: Australian Video Game Market

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