Video Games Market Demonstrates Over 100 Per Cent Growth In Six Years

Wednesday 1st September 2004/... The world market for video games continues to grow at a faster rate than ever before, according to one of two new reports by analysts Screen Digest on behalf of ELSPA, the Entertainment and Leisure Software Publishers Association. Over the last six years (1997 - 2003) the interactive leisure software market in the UK has grown by over 100 per cent, far outstripping cinema box office (30 per cent), VHS/DVD rental (14 per cent) and music retail which has actually fallen by 4.5 per cent over the same period.

Compared to the rest of Europe, the UK console software market is larger than both France and Germany combined, despite the UK population being just under 60 million with the other two countries at over 140 million.

UK maintains its ranking as third largest market in the world after the US and Japan. The Western European market as a whole was $1.2bn smaller than the US market but $3.7bn larger than Japan in 2003. This will most likely further expand as the ten new EU member states become more sustainable markets. Screen Digest estimates that the global interactive leisure software retail market was worth $18.2bn in 2003, up 10.8 per cent from 2002. The UK 2003 market rose by nearly seven per cent over 2002, to £1,152m (€1,677m), the highest value ever reached. This contributed to a total UK market of over £2bn for software and hardware (excluding PC) for the second year running.

In 2003, leisure software maintained its position as one of the UK's industrial success stories with a positive balance of trade in excess of £200m, as opposed to film and TV which continue to exhibit substantial negative balances of trade.

Roger Bennett, director general of ELSPA, said: "The computer and video games industry continues to demonstrate the most dynamic growth rate of all the creative industries. As both central and local government recognise the value of this industry to UK balance of trade, it is gratifying to have proof of the every growing popularity of interactive entertainment and the broadening customer base."

Ben Keen, Chief Analyst of Screen Digest, commented: "Our research suggests there is plenty more scope for strong sales within the current console cycle. However, innovation is the cornerstone of the games industry and we expect the launch of exciting new handheld machines to give the market a huge boost ahead of the next generation of TV-based consoles."

Since 1995, over 25m dedicated gaming devices were sold in the UK (not including PC), which is enough for every household in the UK to have one. In addition, more than 280m units of leisure and games software have been sold in the UK over the same period; enough for every household in Britain to own eleven titles each. Across Europe, a staggering 1.1bn-plus games or edutainment CD-ROMs will have been sold over those eight years. Across the world, the total number of leisure software units sold since 1995 is over 3.5bn.

Looking ahead, Screen Digest predicts that the global retail market will grow by 16 per cent to reach $21.1bn by 2007.

The two reports by analysts Screen Digest on behalf of ELSPA are:

1 - Interactive Leisure Software: Global Market Assessment and Forecasts to 2007 - available from 1st September 2004.

2 - European Video Games: The 2004 State Of The Industry Report - available from October 2004.

EDITORS NOTES

About ELSPA - http://www.elspa.com

ELSPA (The Entertainment & Leisure Software Publishers Association) was founded in 1989 to establish a specific and collective identity for the computer and video games industry. Membership includes almost all companies concerned with the publishing and distribution of interactive leisure software in the UK.

ELSPA's activities include: Official Chart and Industry Reports, Anti-Piracy UK and EU, PR and Communication, Events. More information on all these activities can be found at http://www.elspa.com.

The UK Interactive Leisure Software Industry - Facts & Figures from ELSPA/Screen Digest/Chart-Track:

• The UK is a world centre for games development.

• In 2003, UK sales of video games, other leisure software products and games consoles topped £2 billion, for the second year running.

• Over 20,000 people are employed in the UK leisure software sector.

• The British games industry generated £494m of exports in 2003. 33% of all PS2 games bought in Europe originate in the UK (the same proportion as US originated products and ahead of Japan and any other country).

About Screen Digest - http://www.screendigest.com

Screen Digest is the pre-eminent source of business intelligence, research, and analysis on global audiovisual media. Screen Digest the journal has been published for more than 30 years and is read in over 40 countries. First and foremost, Screen Digest is a research company and publishes a rapidly growing number of major business reports on media markets. The company also offers continuous online research services providing searchable access to a vast database of global audiovisual market research information. In addition, Screen Digest provides a strategic consultancy service and has undertaken a wide variety of bespoke projects on behalf of numerous national and international organisations.

For further information or to arrange interviews, please contact:

ELSPA:

DEBORAH COSTER / EMMA COWIE

BARRINGTON HARVEY

Tel: 01462 456780

Fax: 01462 456781

Email: debi.coster@bhpr.co.uk / emma.cowie@bhpr.co.uk

SCREEN DIGEST:

DAN STEVENSON / FAY HAMILTON

SCREEN DIGEST

Tel: 020 7424 2820

Fax: 020 7424 2838

Email: dan.stevenson@screendigest.com / fay.hamilton@screendigest.com