Australians spent an incredible amount of their hard-earned dollarydoos on video games last year.
According to new data released today by the Interactive Games & Entertainment Association (IGEA), Australians spent a whopping $4.4 billion on video games and games-related hardware in 2023. The humble PC was by far its most resurgent platform.
What’s up? What’s down?
That’s a total jump of 5% from 2022 and represents an increase of 11% around digital sales. Traditional brick-and-mortar remained fairly flat, growing only 0.5%, but didn’t actually drop, thanks largely to one particularly popular game. “The traditional retail video games market in 2023 witnessed relatively stagnant growth compared to 2022, driven by increased spend in software across the board, with Hogwarts Legacy emerging as the best-selling physical title in Australia for 2023,” says Aidan Sakiris, APAC Regional Manager for Product Marketing & Reporting at Sparkers.
Also up? Digital microtransaction purchases and subscriptions like Game Pass and Fortnite Crew. These rose 31% on 2022, itself a 55% increase on 2021. Australians love a subscription, it seems. “As was the case last year, the appetite in Australia for multi-game subscriptions remains above average. In 2023, the growth in this segment was 2x the global average,” said Tom Wijman, Lead Analyst Games at Newzoo.
Mobile also saw a modest rise, carving out a $1.58 billion spend, rising just 1% on 2022.
Compounding quieter retail returns was a flat year for hardware sales. Sparkers mostly attribute this to a slowing of Nintendo Switch sales offset by continued, gradual uptake of the PlayStation 5.
“The Australian video game market continues to show resilience as we enter the fourth year of the current console generation, as well as four years post-pandemic lockdowns,” continued Sakiris. “Looking ahead, the industry seems to be back on track with planned development schedules, as consumers anticipate a variety of software releases, some of which are expected to gain traction due to the strong install base of current-generation platforms.”
The takeaway
So, what’s the takeaway? Australia likes video games, and we bought a LOT of them in 2023. However, flat hardware growth suggests that the machines required to play the newest games may feel out of reach.
Hardware is expensive and, in a cost-of-living crisis, hard for people to justify. As an example, we know that half of PlayStation’s audience is still running a PS4 over upgrading to a PS5. The reason for this is obvious: $800 is a lot of money to shell out for a new console. Things aren’t easy on the manufacturer’s end either — discounts come and go, but component and manufacturing costs are still high. This makes it tough for hardware makers to justify the mid-gen refreshes that precipitate permanent price drops on older models. Normally, a revised model would be coupled with something at the ‘prosumer’ tier — the PS4 and the PS4 Pro, for instance. The ‘Slim’ model usually settles into a new lower price while the Pro takes over the original launch pricing. Last year, Sony refreshed the PS5 with no major hardware changes and slotted it back into the same $799 price point with no word on a Pro model.
Xbox attempted to head off a similar fate by building the Slim/Pro duality into its release model from the start. Because the Series X and S have sold poorly in an already dry market, it hasn’t (officially) started to talk about refreshes yet, and neither machine has seen a price drop. And then there’s the Switch, still retailing for full fare as it limps toward retirement in 2025. Its sales were already winding down naturally, and they’ll drop even faster in anticipation of a new model next year.
And so a circular market force is born. Prices aren’t coming down because makers can’t afford to lower them, but that also means people aren’t buying because they can’t afford to do so. That has a flow-on effect on the wider market that’s visible in today’s numbers.
For the hardware we do have, though? Australia still wants to enjoy them and is spending big to make the most of it.
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