Record sales as Kiwis spend $347 million on interactive games

Kiwis spent a record $347 million on interactive games last year, as digital sales soared 34% and retail console hardware and accessory sales also grew significantly.

The Interactive games and Entertainment Association (IGEA) says the 18% year-on-year increase in overall sales came despite a drop in retail sales, which were down 2% to $130 million.

That decrease was more than offset by the 34% jump in digital sales, to $217 million.

Those results come as Minister of Revenue Todd McClay asks officials to look at the measures other countries are taking to collect sales tax on digital imports such as games, music and films.

On the retail side, console hardware and accessory sales bucked the downward trend, recording increases of 24% to $40 million and 2% to $16 million, respectively, following the launch of the PlayStation 4 and Microsoft Xbox One.

New consoles have shown the highest sales within the first 12 months of launch of any console hardware entering the New Zealand market, IGEA says.

The PS3 and Xbox 360 continue to contribute a 'significant' amount to overall software sales, the report says.

Sales of console software sold through traditional retail outlets slipped 9.3% year-on-year, to $64 million, though PS4, Xbox One, 3DS and Wii U all experienced software growth.

Digital downloads climbed 13% to $54 million, with the majority of New Zealand mobile games revenues generated through in-app purchases.

IGEA says the shift to mobile and subscription-based services showed the largest increase, continuing a trend established in previous years.

The research, conducted by technology analysts Telsyte, shows subscription-based services soared 41% to $31 million, while mobile games and in-app purchases jumped a 'staggering' 43% to $132 million.

Mark Goodacre, IGEA New Zealand director, says new major console releases and an ongoing shift toward digital sales clearly show New Zealanders to be avid consumers of games across a wide variety of platforms.

"The strong overall growth of the industry highlights the fact that New Zealanders are exploring a range of ways to purchase video games and hardware, from traditional bricks and mortar stores through to online retailers. New Zealanders are also embracing the new and complimentary ways to play games on mobile and tablet devices.

Foad Fadaghi, Telsyte managing director, points towards mobile gaming as driving the industry, followed by digital and subscriptions.

"The New Zealand interactive games market continues to driven by the strong uptake of tablet and smartphone gaming, as well as a burgeoning digital download market, which is set to grow substantially to 2019," he says.

He says better internet connectivity will further drive a shift towards digital delivery of interactive content and provide opportunities for further gaming innovation, ushering in 'a new era of gaming for many New Zealanders, including virtual reality and cloud game services.