€211m spent locally on retail video game products last year

5 Apr 2012

Despite the closure of the GAME group of stores in Ireland last week, the Irish retail games market is actually one of the most vibrant in Europe and last year €211m was spent by Irish consumers on video game products. This yielded the State €44m in VAT.

Research compiled by Jamie McCormack, markerting manager with Gala Networks Europe as part of a series of research projects aimed at quantifying the scale of the opportunity for the gaming industry in Ireland showed that Ireland’s retail games market is about 7pc of the size of the neighbouring UK market.

Retail games sales in Ireland grew from €178m in 2001 to peak at €293m in 2008 at the height of Ireland’s economic boom and have fallen to €211m today.
By comparison the UK video games retail market grew from stg£1.6bn (€2.5bn) in 2001 to peak at stg£4bn (€4.1bn) in 2008 before falling to stg£2.5bn (€3bn) last year.

The average games consumer in Ireland spends €46.96 a year on game products while the UK is slightly lower at €44.73.

McCormick said that Ireland has one of the youngest and most internet and games-connected populations in Europe, helped on by the fact that for example Ireland has the highest per capita penetration of Sony PlayStation machines globally outside of Japan.

He also pointed out that 2001 and 2002 were big sales years for the PlayStation 2 and Xbox consoles and that 2008 and 2009 were big years for the Wii, PlayStation 3 and Xbox 360 leading to a higher proportion of hardware versus software sales than later years.

Opportunities for GAME workers

McCormick said that despite the closure of GAME, the retail space in Ireland for gaming products is quite significant and the games buying power of the Irish consumer remains significant. He said the closure of GAME and its financial problems owed more to the success of GameStop and GAME’s acquisition of Game Station than the heath of the market.

He said that there’s a skills shortage in the area of support staff for massively multiplayer (MMO) online games and cited the example of Gala Networks which has grown to over 120 people in Dublin and EA Games’ Bioware operation in Galway which has announced 200 jobs to support the launch of the Star Wars game The Old Republic.

“A lot of jobs would be available in customer service and I would urge the former GAME staff to realise there are opportunities.

“Hopefully people who are doing sit-ins will realise that there are MMO companies in Ireland that would be interested in hearing from them,” McCormick said.

McCormick is currently focused on evaluating the actual size of the gaming industry in Ireland, from the indie shops and game repair outlets to the large websites, developers and publishers.

Forfas estimates that 4,500 jobs could be created in the games space in Ireland. “But if we are to double the size of the games industry we need to know how big it is first.”

Another core trend McCormick is noticing is the rise of young app developers who are selling games on the iOS and Android ecosystems. “If a game sells 100,000 apps at €2 a pop – that’s €200,000 in revenues. That’s a lot of money.

“This is the new economy. It’s no longer about Fruit of the Loom workers packing t-shirts in Donegal, everything is going online and people are monetizing bits and bytes,” McCormick said, pointing to World of Warcraft which generates US$100m worth of revenues a month.

“Let’s ensure Ireland gets more than just a cut of that. To enjoy success we need to sustain growth at such a pace as to find the two solid performers for every 15 or 20 indie studios that will emerge.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years