Record breaking early Xbox One, PlayStation 4 sales indicates pent-up consumer demand for next generation of games machines & window of opportunity for UK devs
TIGA, the trade association representing the video game industry, has welcomed early sales figures for both Xbox One, which launched in the UK on the 22nd of November, and PlayStation 4, which will be released this Friday. TIGA has also called for UK developers, where possible, to capitalise on the pent-up global demand for next-gen console gaming while there is still time.
Microsoft has sold more than one million Xbox One consoles within 24 hours of launch, across the UK and 12 other countries, whilst Sony also sold a million PlayStation 4 consoles in 24 hours in the US and Canada alone.
This extremely positive consumer response, breaking both companies’ first day console sales records, demonstrates the pent-up market demand for next-gen consoles. Historically the average console cycle has been around five years, with the Xbox 360 shortening that to four, yet consumers have been waiting for nearly eight years for Xbox One and PlayStation 4.
Developers are still coming to terms with the new technology and expecting publishers to commission new content so the availability of games on the new consoles is relatively small at this stage. Due to this lower supply, and constrained consumer demand, those UK developers who are in a position to launch games on Xbox One and PlayStation 4 within the next 12-18 months would be well advised to do so. Especially as both new machines will offer UK gaming businesses access to a sophisticated, global digital marketplace from day one, the first consoles to do so.
Also of great significance is the decline of the UK games development sector over recent years, meaning there are comparatively fewer UK businesses competing against each other in the console space. The UK’s games development workforce declined by seven per cent between 2008 and 2012, many studios closed and the country’s capacity to make culturally British video games was undermined. This is because the UK lacked a Games Tax Relief during this period in contrast to Canada and many states within the USA. As a result, the UK lost out on jobs, investment and game projects.
This underlines the need for UK games businesses to maximise the opportunities presented by the new console cycle and for Games Tax Relief to be implemented as soon as possible in order to provide the support the industry needs in order to return to sustained growth.
Dr. Richard Wilson, CEO, TIGA, said:
“Consumers’ response to the recent launch of Xbox One, and on Friday the launch of PlayStation 4 in the UK, has been thoroughly encouraging for the UK games industry. The new consoles present UK developers with a global window of opportunity, even though both are launching into a radically different business environment in the UK and around the world.
“This fresh and welcome optimism must however be tempered with an understanding of the current business realities facing The UK games industry, which has been competing on an unlevel playing field in recent years. While many of our competitors have benefited from tax relief, reducing their development costs, UK businesses have lacked any equivalent support. As a result, many studios have closed and many developers have left the UK to work overseas. Many of the start-ups that have since emerged also lack the resources or capacity to deliver big-budget console games that can take 18 months to three years, or more, to complete.
“Nonetheless, because of this combination of factors, over the next 12-18 months the console game market will benefit from higher than normal demand, and lower than normal competition and supply. TIGA is calling for any UK developers with the capability to get their games onto these next-gen machines to seriously consider doing so as soon as possible.”
Jason Kingsley OBE, TIGA Chairman and CEO & Creative Director, Rebellion, added:
“The launch of a new console cycle is a global tech event, and it is exciting to have two launching so close to one other. This drives up interest and ultimately means more games players around the world who can potentially buy British games.
“What’s different about this generation is that from day one UK developers are able to sell into a global market on the Xbox One and PlayStation 4, and apply a great deal of business insight and experience gained from the explosion of mobile gaming over the past couple of years. Hopefully this will increase the potential for breakout hits from independent UK developers in the console space.
“2014 could still be a tough time for UK developers generally, due to the pace of change and lack of equality in state aid compared to our competitors in places like Canada and the USA. However, there are opportunities out there for those businesses that can move fast enough to take advantage of them. TIGA will be doing everything we possibly can to help them succeed.”
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About TIGA
TIGA is the trade association representing the video game industry. We help developers and digital publishers build successful studios, network with the right people, save money and access professional business advice.
We also have outsourcing companies, technology businesses and universities amongst our membership. Since 2010, TIGA has won 16 business awards.
TIGA focuses on three sets of activities:
- Political representation
- Media representation
- Business services
This enhances the competitiveness of our members by providing benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities.
It also means our members’ voices are heard in the corridors of power and positively represented in national, broadcast and UK video game trade media.
Get in touch:
Tel: 0845 468 2330
Email: info@tiga.org
Web: www.tiga.org
Twitter: @TIGAMovement
Facebook: www.facebook.com/TIGAMovement
LinkedIn: http://www.linkedin.com/company/tiga
For further information, you can also contact:
Dr. Richard Wilson, TIGA CEO on: 07875 939 643, or email: richard.wilson@tiga.org
Drew Field, TIGA Communications Director on: 07720 643 344, or email: drew.field@tiga.org