Games industry to pwn music industry x3?

Work commitments have made it pretty hard to write on G/L for a little while, folks, for which I apologise.  So, I thought I’d kick off a new series of posts with the interesting news (courtesy of the FT) that “the global video games market will expand to three times the size of the recorded music market by 2014” according to PwC.  “This will take the industry’s revenues from $51bn to $84bn by 2014, PwC forecasts, contrasting with revenues of $28bn for recorded music“, the FT also states. 

Clearly, taken at face value this is great news for the games industry.  That said, I have two observations about this piece:

(1) The games industry, like other fast-maturing industries, appears to be increasingly open to blizzards of statistics, from which conflicting signals are derived.  On the one hand we have this rosy view of the games industry from PwC, but on the other hand we have gloomy reports of the games industry being battered by the recession with an unimpressive outlook for the future (like this one courtesy of GfK/MCV).  Now, obviously the response to those examples is that we are comparing apples and pears, but the simple point is that numbers and figures are flying more and more around the games industry. (At this point, when I’m talking about statistics, I like to show a lawyer’s scorn for numbers by quoting Disraeli: “There are three kinds of lies: lies, damned lies, and statistics“.  In other words, the true position is clearly that games are performing really well, but who knows how well they will perform vis a vis the music industry really?)

(2) The more substantive observation is this: the FT comments “the report shows signs of hope for content owners in the fight against piracy. The music industry, which suffered earlier and more severely than other media owners from illegal digital file-sharing, saw Asian sales rebound by 9 per cent last year, thanks in part to South Korean’s threat to cut off internet access for copyright infringers.”

Now, this blog has written previously several times about the issue of copyright infringement/piracy and how it affects games (most recently, the impact of the Digital Economy Act on the games industry).  But, clearly it remains to be seen exactly if/how/when anti copyright-infringement/measures like the Digital Economy Act will have an impact on the bottom line figures for the games industry.  At the moment, not a great deal is happening on that front in the UK, since Ofcom is working on its guidance for the implementation of the DEA.  Still, I suspect that this is a theme that we will be revisiting several times in the future…

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