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March 5, 2018updated 21 Jul 2022 1:48pm

Nintendo Switch helps UK games market hit a record £5 billion

The UK games market hit a record £5 billion sales mark for the first time last year following the introduction of Nintendo’s hybrid Switch console, and increasing sales of virtual reality (VR) headsets.

By Pamela Kokoszka

The UK games market hit a record £5 billion sales mark for the first time last year following the introduction of Nintendo’s hybrid Switch console, and increasing sales of virtual reality (VR) headsets.

Consoles, games, hardware such as headsets and attending events contributed to a 12.4% increase to a total of £5.11 billion, defying the wider decrease in consumer spending across retail.

Trade body UK Interactive Entertainment (Ukie) credited this growth from 2016 to ‘an ever-expanding audience’.

Console sales, including PS4 Pro and Xbox One X, grew 30% to £659 million. Prior to this increase, console sales had been declining since 2014.

Dorian Bloch, Senior Client Insight Director at GfK Entertainment, said: “It is clear that the console gaming market is now enjoying a renaissance,” said Dorian Bloch, director, entertainment at GfK. “Nintendo’s Switch has enjoyed the best [sales] start for a Nintendo home console since the mighty Wii back in 2006.”

Gaming fans also spend more than £100 million on headsets, a 23.5% increase.

This corresponded with an increase in demand for greater graphics processing power to create VR experiences and worlds which increased PC game hardware sales by 51% to £376 million.

Bloch said: “Gamers are serious when it comes to acquiring state-of-the-art equipment to fuel a premium gaming experience,”

The largest part of the market is taken by games software, with overall sales increasing by 8.3% to £3.56 billion.

Digital and online PC and console sales increased by 13.4% to £1.6 billion. Mobile market also showed an increase of 7.8% to £1.07 billion.

Non-digital games also saw a surprise small rise in sales, which was driven by the popularity of titles such as Fifa 18, Call of Duty and Grand Theft Auto.

Carter Rogers, senior analyst at SuperData Research, said: “While the rise of free-to-play business models has broadened the gaming audience, players in the UK are especially willing to pay upfront for major titles like Call of Duty: WWII and PlayerUnknown’s Battlegrounds.”

Rogers believes that major console games and premium PC titles were the drivers of 42% of digital game revenue, which is greater than 32% in Europe or 14% worldwide.

According to British Games Institute, the UK is one of the top five video game producing countries in the world. Some of the biggest video game franchises such as Grand Theft Auto, Total War, and Tomb Raider, were all developed in the UK.

The increase in new game sales has contributed to driving down the second-hand market 15% to £101 million.

Gamers have also spend their money on gaming events, expositions such as EGX and Insomnia, as well as eSports which have contributed to a 13.4% increase in ticket sales to £8.4 million.

Game-related toys and merchandise shopping increased by 6.8% to £72.9 million despite the decline in general toys market, which has recently put Toys R Us into administration.

According to Ukie, this is due to ‘stronger game representation in cinema’ in 2016.

Jo Twist, chief executive of Ukie, said: “It’s been another year of growth for the games industry with UK consumers demonstrating they have a strong appetite for what our innovative and creative sector makes.”

She added: “The games sector is constantly innovating and investing in new experiences, technologies and the skilled people to make an ever more compelling and diverse range of games, bringing tremendous value for money to consumers’ year on year.”