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And Yet It Grows: Analyzing the Size and Growth of the European Game Market
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And Yet It Grows: Analyzing the Size and Growth of the European Game Market


November 17, 2009 Article Start Page 1 of 4 Next
 

[Is the European game market even more important that many think? Gamasutra sifts through data for the tremendously diverse region to discover the current shape -- and prospects for growth -- for the area's complex ecosystem.]

In the last few years, the European market has been an object of special interest for both publishers and analysts. Many articles have been written evaluating whether Europe is a key territory to invest in, speculating whether it's really growing that fast, and wondering if it has already surpassed North America as a revenue source.

The buzz may lead many to believe in an exponential growth, but the truth is far from such an excessive estimate.

Although it's hard to come up with definitive data from a territory that is fractured into several different countries, languages, and identities, it's safe to assume that Europe is an emerging market to keep an eye on, but it still has a long way to go before it reaches North America's level of establishment.

The Data Difference

It's important to note that unlike the NPD Group, there is no single source of sales information for European territories. A recent presentation from Nintendo previously reported by Gamasutra showed partial charts collecting sales data from various sources such as ELSPA (UK), Gfk (France), Media Control (Germany), and AC Nielsen (Spain). Eastern Europe is almost always absent from data aggregation, as are most Southern European countries where small businesses are still more prevalent than big box retailers.

Most data seems to come from the aforementioned markets, which leaves out a big slice of the European consumer base, including Benelux, Scandinavia, and the fast-growing Russian demographic. Therefore, while the information presented represents a sampling of Europe's most highly populated markets, the lack of a comprehensive sales aggregator does make a decisive analysis more difficult.

The aforementioned Nintendo presentation shows a comparative analysis of the hardware sales for both home consoles and handhelds. As of 2008, North America was still leading with over 18 million hardware units sold, and Europe following with 12 million.

Partial data from Screen Digest, focusing on current generation home console games, confirms Europe's second place, with 110 million games sold to date in 2009 versus 168 million sold in North America.

When projected over a time span of several years, from 2005 to 2013, however, the data shows a slightly more consistent growth in Europe (+208%) than in North America (+186%). If this projection also applies to PC, handheld and downloadable titles, it is safe to assume that Europe is an emerging territory, although perhaps not growing as dramatically as we are commonly led to believe.

Annual sales reports from major publishers also seem to confirm this trend. Konami is perhaps the most exemplary case: during the last year the company sold 10 million games in Europe, versus 7.2 million in North America. The European success was partly due to the release of Metal Gear Solid 4, as one would expect, but it mostly depended on Pro Evolution Soccer 2009, a consistent franchise for that market.


Pro Evolution Soccer 2009

The same passion for soccer contributes to Europe totalling a consistent 40% of Electronic Arts' global sales. The latest installment in the FIFA series, FIFA 10, sold over 1.35 million units in that territory in just two days when it was launched in September, placing itself as the third fastest selling game ever in Europe.

Even better than Electronic Arts, Ubisoft has a stronghold in Europe, which represented a remarkable 54% of the company's overall sales in 2008. Other publishers, however, are still considerably stronger in North America than in Europe: such is the case with Take-Two, Capcom, Square Enix, and Activision.

Some of the publishers mentioned take on different business ventures in Europe. Activision, for example, distributes LucasArts titles for the market. Prior to its acquisition of UK-based Eidos, Square Enix was distributed by various national distributors (such as Deep Silver in Germany and Halifax in Italy). Now, with its purchase of Eidos, the company is taking charge of distributing select titles from other Japanese publishers, such as Nippon Ichi, Atlus, and its subsidiary Taito.

These distribution wings create a different business atmosphere than in North America. Based solely on earnings through self-published titles, Activision made $325 million in European revenue in 2007 versus $753 million in North America. If one factors in distribution for other publishers, the company's total European income rises to $719 million, nearly reaching parity between both regions.


Article Start Page 1 of 4 Next

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