UK Leisure software market shows strong upward trend ahead of expectations

UK leisure software market shows strong upward trend ahead of expectations.

1999 Sales Value Expected to be More Than Double the 1996 Total
Advance Information from 2nd ELSPA Industry Report

Advance information from the second annual report by The European Leisure Software Publishers Association (ELSPA) and Screen Digest into the UK leisure software market, reveals today that the market is performing at a level ahead of expectations and outstripping rates of growth in all other mature industry sectors in the UK.

The announcement comes on the second day of the ECTS computer show at Olympia in London. The UK is recognised as a world leader in the development of ground breaking computer games, as a result, for three days every September, the London show becomes the focus of attention for the global leisure software market. One quarter of all the leisure software bought in Europe originates in the UK and British products last year achieved an impressive 12 per cent share of the lucrative US market.

The ELSPA Industry Report predicts that the total UK leisure software market will reach nearly £850 million in 1999, having more than doubled in size since 1996 when the market was worth just £350 million. Last year, the leisure software market was 1.4 times the size of the UK cinema box office and 1.8 times larger than spending on video rental.

The second half of this year will see the launch of the new Sega Dreamcast console, which is expected to provide a significant boost to software sales. The rise of on-line games retailers – particularly gameplay.com, which acquired Wireplay from BT this year – has provided further momentum in the market place.

The UK is far and away the greatest European investor in the development of games software. This year, an estimated £300 million will be invested in this country, a 23 per cent rise on the £243 million invested in development in 1998. In terms of the creative talent behind the world’s best-selling games, Britain is a global powerhouse with an estimated 250 development studios located here – far more than any other European country.

British produced games are estimated to have generated a staggering £1.1 billion in retail sales outside the UK last year, generating a hugely positive balance of trade. To place this in context, the British film and television industries recorded a trade deficit of £190 million in 1996.

The dynamic state of the market is reflected directly in job creation. An estimated 5,600 people are now employed in the creative development studio sector alone. The UK is now home to the European headquarters of all the world’s leading leisure software publishers - including Sony, Acclaim, Electronic Arts, Sega and Konami among others – who are attracted by the UK’s rich skills base and wealth of creative talent and its relatively flexible employment legislation.

The one cloud on the horizon is the growing problem of software piracy – the expansion of the market for computer games has attracted an increasingly organised black market for illegal copies. ELSPA estimates that this black market will cost the industry more than £3 billion this year in lost sales and the UK economy will lose over £5 million in lost tax revenue. To tackle the problem head on, UK publishers, this year, banded together to provide additional funding of £200,000 to ELSPA to increase its team of investigators - from three in January this year to twelve by the end of this year. In addition to increased investigation and prosecution of software criminals, ELSPA has also commenced a campaign to change public attitudes to software theft. In August, it launched a hard hitting consumer advertising campaign that highlighted the fact that 80% of the people prosecuted for games piracy are also involved in peddling drugs, pornography, theft or other crimes. Since launching the campaign, tip-offs from the public about serious piracy operations have increased by more than 50% over the average of 265 per month.