Games retailers in for another massive holiday, despite digital domination

The four months between now and Christmas is typically harvest season for the publishers of blockbuster (or so-called AAA) video games, as the biggest, boldest and most beautiful releases of the year battle for gamers' attention on shelves both physical and digital.

But at a time when the biggest game in the world is Fortnite — a free-to-play, download-only game you can play forever and won't find on store shelves — do Australians even go to retail stores to buy video games? Does JB Hi-Fi get any cash out of the Battle Royale craze? Are creators of $100, 20-hour experiences still making money?

The answer to all these questions is yes, and here's why.

Red Dead Redemption 2, from Rockstar, is one of the year's biggest games. A massive 95 million copies were shipped of Rockstar's last game, Grand Theft Auto V, making a mint for it and parent company Take-Two.

Red Dead Redemption 2, from Rockstar, is one of the year’s biggest games. A massive 95 million copies were shipped of Rockstar’s last game, Grand Theft Auto V, making a mint for it and parent company Take-Two.

Fortnite is reinforcing (and is emblematic of) a lot of industry trends, but it's also an anomaly. Like Wii Sports and Pokemon GO before it, it's a phenomenon that's burst outside of the usual video game bubble, ensnaring millions and stealing oxygen away from other video games in the mainstream media sphere, but not necessarily stealing gamers from other games.

In fact, as we've learned from past similar phenomena, the market for AAA games will likely be boosted, rather than diminished, as non-gamers who jumped on the bandwagon move on to other games. And despite the slow move of the entire industry towards an all-digital future, this absolutely means money for bricks and mortar.

Recent research commissioned by the Interactive Games and Entertainment Association (IGEA), shows that Australians spent more than $3 billion on video games in 2017. And while $2 billion of that was in digital purchases across mobile, console and PC (a 9 per cent increase on 2016), around $1.2 billion was spent in physical stores. Retail spending increased by 11 per cent compared to 2016, higher growth than seen in the digital space.

Spider-Man is Sony's big exclusive for the PlayStation 4 this season. Developed by Insomniac (Spyro, Sunset Overdrive), it's expected to be Marvel's answer to the massive Batman Arkham games.

Spider-Man is Sony’s big exclusive for the PlayStation 4 this season. Developed by Insomniac (Spyro, Sunset Overdrive), it’s expected to be Marvel’s answer to the massive Batman Arkham games.

"The empircial evidence is that it’s still a bouyant retail market,” says IGEA chief executive Ron Curry.

“If you look ahead between now and the holidays, the amount of key releases coming out will only support the retail market.”

And it's not only games making money at JB and EB Games. Platform-holders are now selling many more console units per year than they have in a long time. Microsoft sold the supercharged Xbox One X to many players who had already bought an Xbox One, for example, and ditto Sony and it's PlayStation 4 Pro.

Xbox fans and driving enthusiasts are awaiting Forza Horizon 4, the latest in the reliably excellent bi-annual celebration of car culture, this time set in the UK.

Xbox fans and driving enthusiasts are awaiting Forza Horizon 4, the latest in the reliably excellent bi-annual celebration of car culture, this time set in the UK.

Nintendo has a stated goal to selling a Switch console to every single person in a gaming household, not just one per home.

Home console hardware sales in 2017 were up 36 per cent on 2016 numbers, according to the IGEA. In JB Hi-Fi's recent 2017 annual report, "hardware and service" sales were shown to be up 14.4 per cent from the year previous, and this number includes not only consoles but also accessories and redeemable cards, which have become increasingly important to retailers as a way to make money off purely digital games and platforms.

"What we’re also seeing, even around games like Fortnite, is an increase in people buying headsets, buying keyboard and mice. They're also buying cards", Curry says, as well as strategy guides, toys and clothes.

"And there's a lot of gift-givers as well, who would rather gift a physical product to people."

Nintendo is publishing new Pokemon and Mario Party games for its Switch console this season, but Smash Bros. Ultimate will also be a huge system seller.

Nintendo is publishing new Pokemon and Mario Party games for its Switch console this season, but Smash Bros. Ultimate will also be a huge system seller.

Even though they might not physically go to stores (JB Hi-Fi's online sales grew 38.4 per cent in 2017 compared to 2016), there are also those who just prefer boxed games, for a variety of reasons.

"Our national broadband network doesn’t support delivering a good experience for digitally downloaded games. We have data caps, we have speed and consistency issues. You can counter all that with a retail boxed product," Curry says, adding that even consumers with great internet don't always want a digital download.

"There’ll always be a space for both styles of purchase. There’ll always be consumers who aren’t comfortable with trading in a online environment."

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