In the coming years, global revenue in the video game industry will surpass $300 billion. The costs for major game developments are also rising, which will also have an impact on retail prices.
The run-up to Christmas is one of the most important weeks of the year for the electrical industry. It is ushered in by Black Friday and Cyber Monday. One of the sales factors is gaming, as 5.8 million Austrians now regularly play video games.
Bigger than the music industry and the film industry combined
The most popular games are on smartphones or tablets. “Gaming has become the center of society,” said entertainment industry president Niki Laber. About one in three Austrians plays almost every day. The market is getting bigger, customers are getting older. Over the next four years, global sales are expected to increase by as much as 40 percent to more than $300 billion; the sector is already larger than the film and music industries combined.
PlayStation available this year
After smartphones and tablets, consoles are the most popular platform for gaming. Especially at Christmas, one or two Playstations (new: “Slim” version) or XBOX’s end up under the Christmas tree. These are also immediately available this year. Jan Niclas Brandt, CEO of MediaMarkt, emphasizes: “We assume that every technology lover will receive exactly the console or accessories that he wants to put under the Christmas tree for his loved ones or himself.”
Ultimately, a console (400 to 500 euros) is also cheaper than a powerful gaming PC. If you put this together yourself (graphics card, RAM, etc.), you can count on an expenditure of more than 1,500 euros; even “finished” gaming PCs usually cost four figures.
Anyone who already has a console will enjoy one or two games every now and then. Because these have also become more expensive, with very popular titles costing 60 to 70 euros. Austrians spend a total of more than 500 million euros on games. “Over the past two years, there have been attempts by manufacturers to slightly increase prices,” says Martin Filipp of Austrian developer mipumi.
Producing a blockbuster game costs up to a billion dollars
Because the production of blockbuster titles costs large amounts of money. Up to a billion euros are lost, according to the investigations into the takeover of Activision Blizzard by Microsoft. Development (80 percent personnel costs) costs up to 300 million dollars, with marketing and sales accounting for large amounts. Filipp: “3,000 to 4,000 people work on a big game for three to four years. In addition, the effort increases by about a third with each console jump.”
Games are now mainly purchased online. But about four in ten still prefer physical disks. Especially at Christmas, the classic data carrier is more attractive than an online voucher. Subscription models (e.g. Plus membership, Game Pass) are also becoming increasingly popular and are intended to retain customers.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
