Digital games market to exceed $30 billion: Ovum

Ovum has forecasted the Asia Pacific digital games market will surpass $30 billion in 2016

The Asia Pacific digital games market will be worth more than $30 billion in 2016, according to Ovum.

The analyst firm has predicted that revenues will increase at a rate of more than 18 per cent from $13 billion at the end of this year.

A breakdown of the finding shows that in Australia alone, retail sales of digital games — both online games played on PCs or game consoles and those played on smartphones or tablets — will more than double in five years’ time, with sales to exceed $1 billion in 2016 from $456.2 million in 2011.

In addition, the average revenue per user in Australia for online games was found to be about $101.7 in 2011 but expected to drop to $97.1 in 2016; while mobile games was $19.4 and forecasted to reach $21.1 by 2016.

According to Ovum analyst, Mark Little, the exponential growth of ‘casual games’ — simple games with mass-market appeal, such as Angry Birds — have been the primary drivers of revenue growth.

“The rise of casual games is continuing apace, driving soaring digital gaming revenues,” he said in a statement.

“Gaming is fast establishing itself with a much wider mainstream audience, with serious ramifications for other rich-media entertainment such as TV, video and music.”

Little said that the free-to-play business model is also another driver or revenue growth by lowering entry barriers and encourages consumers to buy cheap virtual goods.

“Game publishers’ evolving strategy is turning game products into game services, extending product life with virtual content that continually refreshes a title’s ability to engage the gamer,” he said.

“Besides this, publishers are finding that digital distribution is delivering a host of other benefits.

“These include boosting margins from 20–30 per cent on boxed games, to 50–75 per cent on digital.

“Meanwhile publisher’s use of online passes, increasingly required for network gaming, is cutting down the threat from the pre-owned game market.”

Follow Diana Nguyen on Twitter: @diananguyen9

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