Consumers spent a record amount in the UK video games market in 2020, according to Ukie’s 2020 Consumer Market Valuation
The UK consumer games market was worth £7bn for 2020; a 29.9% increase on 2019’s market and over £1bn higher than 2018’s previous record total of £5.7bn.
Sales of games software across all categories grew by 18.5% from £3.8bn to £4.5bn, with revenues from digital sales encompassing 85% of all software sales. Despite limited access to the high street, sales of new boxed games reversed the trend of recent years to grow 7.1% thanks to increased use of mail order services.
Games hardware saw a record year, growing 60.8% year on year to reach £2.3bn in 2020, with homebound consumers kitting themselves up with new consoles, accessories and upgrading PC game components.
The game culture section of the valuation, measuring revenue from cultural activities associated with games also grew in 2020 to £199m, driven by a 22.4% increase in toys and merchandising revenue which countered COVID-related shortfalls in other categories.
The games market overall grew significantly as a result of the pandemic, which saw people turn to games for entertainment through lockdowns and as a way to connect with friends or family, and the arrival of a new console generation.
The valuation, published as the London Games Festival opens, also showed:
- The launches of the Xbox Series S/X and PlayStation 5 in November played an important role in pushing console hardware revenues up 74.8% year on year, according to data supplied by GfK Entertainment. But the Nintendo Switch generated the largest share of console hardware revenue, with the launch of Animal Crossing: New Horizons in March 2020 at the onset of lockdown a major driver.
- PC games hardware growth was driven in large parts by the shift to home working, with consumers purchasing dedicated games computers to ensure home working set ups could double as entertainment systems.
- VR hardware sales grew by nearly a third to £129m, with the arrival of accessible, standalone headsets such as the Oculus Quest 2 driving the market forward.
- The February release of the hugely successful Sonic The Hedgehog movie, 2020’s only game-related film helped the movies and soundtracks category stave off the worst of the pandemic to manage an overall decline of just 22.2%.
- For the first time, the 2020 valuation includes a measurement of streaming and game video content revenues, with UK consumers spending £45.6m through donations and subscriptions, making up for a notable decline in physical event revenues.
“The latest consumer market valuation confirms just how valuable games proved to people across the country during one of the toughest years of our lives,” said Dr Jo Twist OBE, CEO of Ukie.
“The games sector is a growing, resilient and critical part of the UK’s successful creative industries sector. We all know how important entertainment, technology and creativity have been over the last year. The London Games Festival over the next 10 days will showcase and connect the fantastic leading games businesses right here in the UK with global audiences, investors and publishers, and will demonstrate games’ power to connect, entertain and innovate.”
“The ways in which PC and console gaming evolved across the past decade have made them adaptable to the exceptional conditions of the past year,” said Steven Bailey, Principal Analyst at Omdia. “Experiences driven so heavily by connectivity allowed us to remain social, as we dealt with the difficulties of lockdown, while the versatile nature of digital consumption gave us a number of ways to keep buying and playing games.”
“The 2020 big winner by format was Nintendo Switch for software by revenue,” said Dorian Bloch, Senior Client Director for Market Intelligence at GfK Entertainment. “During the initial Covid lockdown period, covering weeks 13-25 in 2020 where many stores were closed and the initial Covid spike affected many entertainment sectors, we saw massive growth from Switch software sales, up 215% over the equivalent 13 weeks of 2019.”
The UK games industry provided extensive support to communities affected by the COVID-19 crisis. It shared ‘Stay Home, Save lives’ messages in games, provided nearly 100,000 free games to NHS workers through its Games for Carers initiative and supported DCMS’s #LetsTalkLoneliness campaign with a dedicated Play&Talk weekend in June 2020.
The valuation was announced at the start of this year’s London Games Festival, run in partnership with Film London and Ukie. It runs from 19 March to 28 March entirely online, with a wide programme of online cultural and business events and broadcasts that are free to view and includes the Festival’s first ever Official Selection of 40 games to discover and play.
The UK consumer market valuation was compiled by Ukie with the support of ABC, BFI, GfK Entertainment, Kantar Worldpanel, Nielsen Bookscan, NPD, the Official Charts Company and Omdia.
You can read more about the consumer valuation at https://ukie.org.uk/news/uk-games-industry-valuation-2020.
More information about the London Games Festival can be found at www.games.london
It represents nearly 500 businesses working across the UK, including game developers, publishers, platforms and service providers. This includes industry advocacy work, managing industry press relations and running trade missions, as well as providing member services.
— Full valuation breakdown —
|Boxed software||GfK Entertainment||£603m||£646m||7.1%|
|Pre-owned software||Kantar Worldpanel||£55.3m||£42.6m||-22.8%|
|GAME SOFTWARE TOTAL||–||£3.8bn||£4.55bn||18.5%|
|Console hardware||GfK Entertainment||£488m||£853m||74.8%|
|PC game hardware||GfK Entertainment||£485m||£823m||69.7%|
|Console game accessories||GfK Entertainment||£331m||£453m||36.9%|
|VR hardware||GfK Entertainment||£100m||£129m||29.0%|
|GAME HARDWARE TOTAL||–||£1.4bn||£2.26bn||60.8%|
|Toys & merchandising||NPD||£97.7m||£119.6m||22.4%|
|Streaming & Game Video Content||Ukie||£45.6m||–|
|Movies & soundtracks||BFI, OCC, Ukie||£29.5m||£22.9m||-22.2%|
|Books & magazines||Nielsen, ABC, Ukie||£13.9m||£10.5m||-24.5%|
|Events & venues||Ukie||£8.8m||£249k||-97.2%|
|GAME CULTURE TOTAL||–||£150m||£199m||32.6%|