Strong Demand for Computer and Video Games: Sales Up 7 Per Cent (Germany)

Key insights

6 takeaways

01
The German market for computer and video games (including online network fees) grew by 7% in 2016, reaching 2.13 billion euros and surpassing the 2 billion euro threshold for the first time.
02
Total market revenue, which includes hardware and peripherals alongside software, remained stable at 2.9 billion euros in 2016.
03
Sales of games consoles and peripherals declined by 15% to 747 million euros, driven by a drop in average device prices.
04
Revenue from virtual products and additional content—a segment heavily supported by free-to-play titles—increased by 17% to 659 million euros.
05
Fees for online network services, such as PlayStation Network, Xbox Live, and EA Access, saw significant growth of 48%, rising from 77 million euros in 2015 to 114 million euros in 2016.
06
Game subscription revenue grew by 19% to 173 million euros, while traditional sales of PC, console, and mobile games saw a slight 2% decrease to 1.18 billion euros.

Summary

The German games industry experienced a notable shift in revenue streams during 2016, characterized by strong growth in digital content and services despite a decline in hardware sales. The total market value remained stable at 2.9 billion euros, mirroring the previous year’s performance. However, the internal composition of this revenue changed significantly, as sales of computer and video games—including online network fees—surpassed 2 billion euros for the first time, marking a 7 percent increase over 2015.

Key findings highlight a divergence between software and hardware performance. While digital software and service revenue grew, the market for gaming consoles and peripherals contracted by 15 percent, falling to 747 million euros. Within the software segment, traditional game sales saw a slight 2 percent decline to 1.18 billion euros. This was offset by rapid growth in digital business models: revenue from virtual products and additional content rose by 17 percent to 659 million euros, while subscription services grew by 19 percent. Furthermore, fees for online networks, such as PlayStation Network and Xbox Live, surged by 48 percent to 114 million euros.

The analysis covers the German market for the 2016 calendar year. Data was compiled by the German Games Industry Association (BIU) using research from GfK, which utilized a consumer panel of 25,000 individuals representative of the German population. These findings underscore the industry's successful transition toward digital-first business models, such as free-to-play games and recurring subscription services, which have effectively mitigated the volatility of the hardware cycle and traditional retail sales.