Table of Contents

Executive Summary

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TABLE OF CONTENTS

Executive Summary

Industry Structure

BACKGROUND

PRODUCTS

PRICES

ELECTRONIC GAME USERS

INDUSTRY BODIES

Table 1: Prices of a Range of Electronic Games, February 1994

Consumer Profile

Table 2: Attitudes Towards Childrens' Use of Computer Games ( percent), 1993

Industry Supply

LICENSING, OWNERSHIP AND COPYRIGHT

DISTRIBUTION

ADVERTISING

Table 3: Electronic Games - Main Systems Supplied in the UK, 1994

Table 4: Retail Sales of Electronic Games ( percent), 1993

Table 5: Main Media Advertising Expenditure on Computer and Video Games and Consoles (£000), 1993

Market Size

THE ELECTRONIC GAMES MARKET

OVERSEAS TRADE

Table 6: Electronic Games Market (£m at rsp and percent change), 1989-1993

Table 7: Imports of Video Games (£m), 1990-1993

Table 8: Origin of Video Games Imports (£m), 1992

Table 9: Exports of Video Games (£m), 1990-1993

Table 10: Destination of Video Games Exports (£m), 1992

Developments

MONOPOLIES AND MERGERS COMMISSION

MONITOR MAN

TECHNICAL DEVELOPMENTS

HEALTH HAZARDS

INDUSTRY PERFORMANCE

Future Prospects

VIRTUAL REALITY

FAMILY ENTERTAINMENT CENTRES

FUTURE TRENDS

Table 11: Projected Population of Children and Teenagers (000), 1990-2001

Table 12: Forecasted Sales in the Electronic Games Market (£m), 1993-1996

Company Profiles

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

ICC INFORMATION SOURCES

ICC INFORMATION GROUP LTD

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

The electronics games market, comprising systems and the games themselves, is about to break the £1bn barrier, from sales of just £20m only 5 years ago in 1989. The market was valued at £950m in 1993, an increase of 27 percent on the 1992 figure. However, the 1993 increase was modest compared to previous years, with sales increasing by a phenomenal 533 percent between 1990 and 1993. The electronic games sector has been the most dynamic sector of the toy and games industry in the last few years, but its growth has affected the sales of many traditional toys and games.

Market growth has been driven by the two market leaders Sega and Nintendo, and these two companies dominate the sector not only in the UK, but also in the major markets of Europe, US and Japan. These two companies, based in Japan, sell virtually all of the static games consoles in the UK with brands such as Sega MegaDrive, Sega MegaCD, and Super Nintendo Entertainment System (SNES). The major hand-held consoles are GameBoy (Nintendo) and GameGear (Sega). Other hardware suppliers include Commodore, Atari and Philips. The games are published by various suppliers including Nintendo and Sega, but encompassing a range of other publishing and software houses which have sprung up in recent years.

Electronic games have proved most popular with boys between the ages of 10 and 15 years-old, although younger children and some adults are also users. With an estimated 20 percent of UK households owning a games machine, penetration is low compared to the US and Japan, and further growth in ownership is expected over the next few years. Specialist toy outlets have largely ignored electronic games and the major retailers are the electrical chains, High Street multiples like Woolworths and Argos, and mail order channels. Only Toys `R' Us represents toy retailers as a major distribution channel.

The spectacular market growth of the early 1990s is unlikely to be repeated in the next few years, although suppliers are hoping that developments in hardware technology will boost sales. More powerful systems, such as 64-bit machines, and new systems using CD technology are coming onto the market and other companies from the electronics and international media sectors are entering the market. The effect is likely to be a loosening of the hold that Sega and Nintendo currently have on the market. Overall sales in the market are forecast to reach £1.6bn by 1996.

Fears about excessive violence in some games have prompted the games industry to produce its own classification scheme, Monitor Man, for games. Various studies are being undertaken to examine the health risks of games. The UK industry is also being investigated by the Monopolies and Mergers Commission (MMC) following complaints that prices are too high, restrictive practices may be in operation and that Sega and Nintendo are too powerful in the marketplace.

Text © 1994 Key Note

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