UK Video Game Sector Sees Downturn to $8.8 Billion
UK Video Game Sector Sees Downturn to $8.8 Billion, Yet There’s Reason to be Optimistic
UK trade group UKIE reports a 5.6% drop in the value of the video game industry in the UK throughout 2022. Overall market value in 2022 was £7.05 billion ($8.8 billion), 17% higher than in the years before the Covid-19 pandemic.
According to BBC, gaming hardware sales (including consoles) dropped 19% to £2.16 billion ($2.69 billion) last year, while gaming software sales increased by 0.4% to £4.57 billion ($5.71 billion).
CEO of UKIE, Dr. Jo Twist, stated, “We’re thrilled to see the UK video games consumer industry has continued its growth trajectory.” She said that the need for games and the culture around them is clearly still strong in the UK, despite a possible natural leveling out after heightened expenditure during the lockdown years.
UKIE is the not-for-profit trade association representing the United Kingdom’s computer and video gaming sector. The organization represents almost 600 companies, including game designers, publishers, platforms, and service providers.
The Industry’s Financial Outcome
Like the rest of the entertainment sector, the video game business is preparing for the inevitable decline in consumer spending resulting from the current cost of living crisis.
According to a new survey, consumers’ willingness to spend on video games may have been affected by the ongoing conflict in Ukraine, increasing inflation, and peak power expenses.
While gaming software sales grew, console sales were down by 27%. Two to three years after the debut of new consoles (PlayStation 5 and Xbox Series X|S introduced in 2020), sales of the previous generation’s consoles often decrease. Sony has already said that the pandemic is partially to blame for last year’s decline in PS5 sales.
Video content for streaming and games had a 4.8% dip in 2022, which was to be anticipated after the surge caused by the outbreak.
Lego Star Wars: The Skywalker Saga, PlayStation exclusives God of War Ragnarök and Horizon: Forbidden West, Pokémon Legends: Arceus on Switch, and Elden Ring were the best-selling games in the UK in 2022, as reported by the Electronic Retailers Association (ERA) Yearbook 2023.
Despite the delay of many highly anticipated titles, like Hogwarts: Legacy, Starfield, and The Legend of Zelda: Tears of the Kingdom, the video game industry has reason to be optimistic about 2023 sales since they will still be higher than the pre-pandemic average.
Links Between Video Games, Film, and TV
Recent data from the ERA draws parallels between the video game industry and the UK’s film and television sectors in terms of economic effect.
The scope of this study has been expanded to include non-game-related purchases made by gamers, such as PC hardware and software, as well as related items like merchandise and movies based on games. This is why the worth of the UK games industry to the economy is estimated to be larger here than in the ERA’s study.
There were a number of organizations that contributed to this report’s data collection, including the British Film Institute. Harriet Finney, the company’s deputy CEO, has noted, “Development spending on creating new video games fluctuates year-on-year and is influenced by when work starts on larger video game projects.”
