TERRITORY REPORT: RUSSIA RETAIL IN RUSSIA
In association with:
MARKET OVERVIEW
THE ECONOMIC decline bottomed out in mid- 2009 and the economy began to grow in the first quarter of 2010.
After suffering one of its worst years ever in “
Indie retail is strong because it is the only way to reach certain areas. Anatoly Subbotin, 1C
THE DRAMATIC shifts in Russia’s economy have taken their toll on retailers. Some firms such as Mir have gone bankrupt and while others such as Soyuz have found themselves in financial trouble – leaving a difficult retail landscape through which publishers can sell their games. 1C Company’s Anatoly Subbotin says:
“Retail remains weakened after the crisis, with even bigger chains hesitant to develop new stores. Several media specialists were forced to significantly reduce their storecount. “Electronics retail is feeling a bit more confident. Media Markt is continuing to open new outlets but still enjoys a relatively small percentage of the market. “Independent retail remains strong being the only way to reach consumers in some regions and providing the rest with better catalogue and service.”
The situation is made worse by the rampant piracy throughout the territory, as
INSTALLED BASES
300k 600k 900k 1.2m 1.5m
0 1.23m 1.14m 850k
Installed Bases Feb 2011, not incl Ukraine
“ 400k PS2 NDS PSP
GFK STATS show that the market share between Xbox 360 and PS3 is neck and neck, with the leading format often changing from month to month. Xbox 360 has been doing particularly well since the successful launch of
32 May 6th 2011 360
Piracy is a major issue, not only for gaming but for all entertainment. Boris Romanov, Gametec
well as a high level of grey imports, with reports suggesting the latter accounts for up to 30 per cent of the legal market. “Piracy is still a key issue here,” says Gametec’s Boris Romanov.
“While not as visible on the streets as before, it has moved onto the internet. When you can download a new Xbox 360 title weeks before the release date, it means hardcore gamers already have it when you ship the boxed product to retail, which is a shame.
“The same is true for the market-leading PSP platform. Both Microsoft and Sony obviously try to manage this situation globally but locally piracy is still the No.1 issue. “We’ve already become quite accustomed to it and I don’t see or hear any radical movements from anyone on the market to really fight it. It’s a major issue, not only for gaming sector but for the whole entertainment sector here.”
2009, the games market is looking more stable. Software sales revenues were up by around five to 10 per cent in 2010. It seems the peak season was particularly good and a large improvement on the previous year. The crisis certainly caused the market to adjust and adapt and some commentators feel that it is now stronger for it.
The PC sector had another tough year after declining by around 20 per cent year-on-year in terms of value. However, much of this was to the console sector’s benefit, which grew by an impressive 30 to 40 per cent year-on-year. The main software growth is coming from the PS3 format. Microsoft also reported an increase in Xbox 360 software sales following the launch of a ‘harder to pirate’ console. All other formats are suffering from high piracy, which has been stimulated further by the recent economic crisis. After making some commitment to the market, Nintendo seem to have fallen back and neither the Wii or the DS have much momentum and software sales are minimal. With over 150,000 units of Move and Kinect sold into the
marketplace to date, it is thought new consumers are getting into gaming and the market is broadening.
Previous studies have shown that video gaming has been shackled to an anti-social image, whilst the PC has been marketed and perceived more positively as a device that will help the family’s education. This is part of the reason why gaming has remained tied to a hardcore audience.
It is thought that the success of family and social games on Move and Kinect will change this. It certainly seems that there is a great appetite for Kinect software with the title Kinectimals selling more than all previous versions of Haloadded together.
Chris Stanton-Jones is the head of emerging markets specialist Catapult Business Solutions
www.catapultbusiness.co.uk
MARKET VALUE 400k 105k PS3 Wii
Kinect, which many retailers and distributors had underestimated. However, Wii and DS have not performed well. PSP still dominates the portable market and was the best- selling console device in 2010.
(Source: Catapult/Industry Estimates) 0
€100 €200 €300 €400 €500 €600
€560m
Games market Value 2010
€385m
Handheld HW Cons. HW Total SW (Inc PC)
€115m €60m
2010
REVENUES FROM hardware grew significantly in 2010, particularly on PS3, Xbox 360 and PSP.
Nevertheless software continues to lead sales, accounting for 69 per cent of the Russian games market’s
total value. This is driven primarily by PS3 and PSP.
Despite the PSP’s success, lacklustre DS sales means that home consoles have a larger share of the market than handhelds.
(Source: Catapult/Industry Estimates)
www.mcvuk.com
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