Trends within the Game Industry

1
Trends within the Game Industry

• Presentation to
• Games Development Teaching An Industry
  Education Forum
• Adam Lancman, CEO, Atari Melbourne House
• 19 October 2004

2
Overview of Presentation

• Global game industry trends
• Australian game industry today
• Key challenges for game industry
• The Future
• QA

3
Global Game Industry Trends

• Global game market worth around A40 billion and
  growing at 10 per annum
• Game industry now larger than film box office
  2002 global market for games worth A40.9 billion
  compared to global film box office takings of
  A39.6 billion
• Future growth over medium term is high with PWC
  projecting a compound annual growth rate of 20.3
  and rapid growth in Asia Pacific area
• PWC projects global market to reach A85.8
  billion by 2008 with emerging software segments
  such as online, mobile and ITV to account for a
  significant portion

4
Global Game Industry Trends

• PWC projects Asia Pacific will continue to be the
  fastest growing region going from A12.9 billion
  in 2003 to A36.7 billion in 2008
• 70 of game players are over 18 years, with 20
  aged 39 years plus
• While game software sales grew by 5 in 2003,
  growth is slowing as console sales fall (down
  12.3) and publishers (notably EA) call for
  further reductions in hardware pricing to
  stimulate sales
• Handheld software is predicted to grow with
  introduction of Sonys PSP, Nintendos Dualscreen
  and growing mobile phones while PC market is
  expected to fall further

5
Global Game Industry Trends

• Increased convergence occurring between game
  industry and other content industries emerging as
  key trend
• Becoming common now in US for games to be
  developed in conjunction with film properties
• Local examplesAtari Melbourne House QA for
  The MatrixKrome Studios King ArthurRatbag
  Dukes of HazzardBlue Tongue Polar Express

6
Australian Game Industry Today

• Australian game industry, a niche player in
  rapidly expanding global context, is
  characterised by
• high export orientation A100 million per annum
• high-value added employment directly employs
  over 700 people in 40 companies
• strong synergies with other creative content
  industries such as film and software development
  industry uses around A10 million per annum of
  inputs from IT and film sectors
• Australian game industry has to date largely self
  funded investment and growth

7
Key Challenges for Game Industry

• Rising complexity and cost associated with game
  development, and consoles in particular, requires
  Australian industry to achieve greater scale in
  operations growth in service and sub-contracting
• Critical mass is required if Australian industry
  is to achieve a sustainable growth position
  within global market it must be large enough to
  develop and retain its own IP vision is 6-8
  companies with 150-200 staff each

8
Key Challenges for Game Industry

• Access to an optimally functioning private
  capital market for game investment is critical if
  industry is to develop to full potential
  private/public models 10BA and concessions
• Developing and retaining skilled talent
  currently a mix of offshore and local talent we
  need to ensure we can meet demands for new talent.

9
The Future

• Industry ownership of a considerable IP portfolio
  that both generates a strong royalty stream and
  positions the industry to create and retain
  ownership of follow-on game titles
• Game exports exceeding 300 million per annum
• Direct industry employment exceeding 2,000, and
• Recognition of Australia as a centre of game
  development excellence with a sustainable
  position within the rapidly expanding global
  industry

10
The Future
11
Question and Answers

• Thankyou for your time