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Games overtakes video as UK's biggest entertainment category in 2011, But video is fighting back

Online overtakes bricks and mortar in music for the first time

22 March 2012: Videogames software overtook video for the first time in
2011 to become the UK's biggest entertainment category, according to the
Entertainment Retailers Association (ERA).

The figures for the ERA Yearbook published today (Thursday 22 March) show that despite
faltering physical sales of console games, digital downloads and app sales
propelled the UK games market to sales of £1,926m in 2011, well ahead of video
on £1,802m and music on £1,066m.

Games accounted for 40.2% of the entertainment market, compared with video on 37.6%
and music on 22.2%.

But in the first 11 weeks of 2012, sales of video on physical formats have been
worth more than twice those of games. Even with the addition of digital, video
is still ahead.

Kim Bayley, Director General of ERA, said, "This is a dramatic time for the
entertainment market. It is an historic development for the games sector to
have overtaken video last year. Video has long been the biggest entertainment
sector. Sales so far this year, however, suggest video is not going down
without a fight."

Overall sales of games, video and music fell by 3.3% by value to £4,795m in 2011.

Digital sales of games were worth £504m in 2011 compared with digital music sales of
£333m and digital video sales of £97m, based on analysis of data from the
Official Charts Company, GfK Chart-Track and IHS Screen Digest.

Online and mobile delivery now accounts for 31% of the music market, 26% of Games and
5.4% of video.

Virtually all physical formats registered falls in sales, apart from vinyl albums (up 44%
by volume), Blu ray ( up 18.5%) and games for the Xbox 360 (up 3.3%).

Said Bayley, "Online and mobile are doing very well, and this reflects the huge
investment, much of it by retailers, in producing new products and services.
Physical formats still account for the vast majority of entertainment sales -
80% of albums are still sold on CD - but lack of investment and innovation in
physical product means it is increasingly under pressure."

Bricks and mortar versus online and digital

Growing sales of online and mobile downloads have combined with surging sales by home
delivery services led by Amazon to put pressure on physical store outlets.
Digital and physical product bought online or via mobile now accounts for 32%
of the video market and 45% of games.

The most dramatic impact has been on the music market where for the first time in
2011, physical stores accounted for less than half of sales - 48.6%.

The ERA Yearbook contains full data on the UK games, video and music markets for
2011. It also highlights key innovations by entertainment retailers in driving
innovation in the market, including:

  • HMV's listening post app
    which allows users to sample tracks from more than 100,000 albums simply by
    taking a photograph of the cover with their mobile phone;
  • Orange's 'Swapables'
    tariff which gives users access to Deezer's streaming music service;
  • Tesco's video locker
    service which automatically gives Clubcard users access to movies they buy on
    DVD on their PCs, Macs, PS3s and other devices.

Kim Bayley said, "Retailers know that innovation is key to maintaining consumer interest in
entertainment. That's why our members are investing heavily in new products and
services. The real innovation gap is in the physical market where our members
buy finished product from film and music and games companies. We will continue
to lobby them strongly to innovate too."



 ENDS



 



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