TERRITORY REPORT: EASTERN EUROPE Poles apart
The games markets on the other side of Europe suffered during the recession, but are now recovering. MCV discovers how a rise in console sales and digital distribution is fueling this growth
THE FAR SIDE of the continent is home to a wide variety of markets. While none may be the size of the UK, France or Germany, when combined they still represent a significant portion of Europe’s gamers. As with any multi-nation territory, it becomes difficult to establish exact market data but the numbers that have surfaced in the last twelve months have been promising. Nevertheless, firms are advised to do their research before entering the region. Key differences in installed bases and consumer tastes business models that prove to be successful in Western Europe are by no means guaranteed to succeed.
“The region is very culturally and economically diverse so it’s difficult to adopt a ‘one strategy fits all’
model,” says TripleACodes’ sales and business director Marcus Whitney. Crucially, it’s important to be aware of the effect the recession had on the area. Many of the markets suffered greatly during the economic crisis and while growth is now apparent in certain areas, the damage has not been completely repaired. “The Eastern European market was one of the hardest hit in a unprecedented year-on-year sales decline,” says Koch Media’s sales and marketing director Paul Nicholls. “We were hoping for the situation to at least return to the previous state, but it seems that consumers remained more conscious of their expenses and have cut back on entertainment significantly.”
EASTERN EUROPE: AT A GLANCE PIRACY
As with most emerging markets, illegal games downloads have been a serious problem for Eastern European territories for several years, particularly in the bigger markets. “The key challenge for the industry
in Poland is still the high rate of piracy,” says Testronic’s Michal Ferlas.
46 March 4th 2011
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“When we compare the size of the potential market – around 38 million people living in Poland – against actual sales and hardware base, it is clear most of the games being played come from illegal sources.” Fortunately a rise in console sales has drawn gamers away from piracy. However, illegally copied Xbox 360
Developer and distributor
Retailers are losing interest in stocking expensive games on their shelves.
Mikica Stakic, Computerland
Techland’s acquisitions manager Jakub Alcer adds: “The direct results of the financial crisis were dealt with but people remain cautious. It seems they’re more likely to deny themselves entertainment than anything else.”
TAKING STOCK Retailers are also becoming cautious when it comes to selecting stock, and video games in particular are finding it harder to secure shelf space. Only a handful of titles are assured success, so stores are determined to minimise the amount of stock sent back to distributors. “Retailers are losing interest in stocking expensive games on their shelves,” says CEO at distributor Computerland Mikica Stakic.
games have prevented that format from achieving its true growth potential and competing with the PS3.
DISTRIBUTION
Each of the territories are served by different distributors, but the financial turmoil has made it difficult for any to seize control of their markets.
“The major problems facing local distribution partners is maintaining a healthy profit and loss with the need of increased costs due to quality localisation and the ‘payment up front’ nature of a republishing deals,” says Koch Media’s Paul Nicholls. “This can put a lot of strain on the cash flow. Add to this the margin
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