How does new game retail stack up in international markets?

For the past few years the NPD Group has been offering a Total Consumer Spend Estimate which attempts to identify how much American consumers are spending on video game content. The idea is to capture just how much money goes toward content regardless of source: from traditional new games sold on physical media to those same games resold as used product, from online games on social media sites like Facebook to mobile games on smartphones and tablets. Last week, the NPD Group announced that its reporting would expand to international markets, including the UK, Germany, and France. I've spent several weeks this year obtaining as much solid data as I can about these same international video game markets (and others), and I'd like to attempt to put together those results with the ones reported by the NPD Group about content sales outside of new products at retail. Regrettably, I don't have current figures for France, so I'll be leaving those out until I have more information. Before I get to the combined content sales figures, let me show a bit about the size of these international markets relative to the United States. If we focus just on retail video game sales – not hardware or accessories – the picture looks like the following. I believe the market in Europe is approximately the same size as that in the United States, but as the figure above makes clear – each individual country contributes just a fraction of the European total. In general, I have thought of the UK market as being larger than the German market. However, the German retail video game market has not been contracting as quickly from year to year as the UK market has since 2008, and as of this year the UK market is down around 30 percent from the same point in 2011. It is entirely possible that the German market is now larger than the UK market, although it may not be possible to say for sure until this time next year when annual sales estimates are released. Now, I want to add in estimates for the content sales outside of new games at retail. In its latest press release, the NPD Group only gave data for the fourth quarter in each of the given countries. However, I have all the extra-retail data for the U.S. that the NPD Group has released over the past couple of years, and I've used that as a model for what happened in the UK and Germany in the other three quarters. Specifically, the fourth quarter of extra-retail sales in the U.S. has generally been 27 - 28 percent of the full year's extra-retail sales. I've estimated the full year in each other country based on this ratio. It is entirely possible that this ratio is grossly wrong in countries other than the U.S., but the public data is not enough to say one way or the other. The result is a possible picture for the full year of content sales in each country, shown below. This pushes total content sales in the U.S. up to $16.6 billion while the UK goes up to $4.1 billion. In Germany the full market goes up to $3.6 billion. The differences in each country are slight, but perhaps worth noting. In both the U.S. and the UK, new retail content accounts for 56 percent of all the money spent on video game content in each of those countries. The fraction for retail is slightly lower in Germany, but very close at just under 55 percent. In the UK and Germany, we can compare these to some other estimates that have been made for market size in 2011. First, MCV pieced together estimates for the UK market that showed an extra $1.09 billion (£678 million) from online and mobile games, in addition to the $2.28 billion (£1.42 million), for a total of $3.36 billion. (On the infographic in the MCV article, I should note that it appears that their accessory and hardware figures are swapped. Hardware sales should be £646 million.) The MCV figures exclude used games, which could make up for some (but I don't believe all) of the $730 million differential between their total and the NPD Group's total. At the very least, the two sources are relatively consistent. Detailed figures for the market in Germany have been released by trade group BIU, and we can compare their extra-retail figures with those from the NPD Group. You will have to know German or have a translator do some work for you, because the English versions of these pages is not up as of this writing. According to the BIU figures, the market for downloaded content of all types was $121 million (€90 million) while an additional $247 million (€183 million) was spent on online and browser-based games. Sales of virtual items brought in $314 million (€233 million). The BIU figures don't include used game sales. So the BIU figures say that the market for video game content outside of new retail games is at least $682 million, which is significantly smaller than the $1.65 billion I estimated based on the NPD Group's figures. Moreover, it's unlikely that the rest of the market – including used video game sales – makes up for the $1 billion differential. That gap suggests that my estimations are wrong (a decent possibility) or that the NPD Group and BIU are measuring the market and getting different sizes. This highlights, again, the inherent difficulty in estimating the market size outside of traditional retail channels. The BIU figures, as I understand it, came from surveys of 25,000 consumers in Germany conducted by GfK. When I asked, the NPD Group told me that their research is independent, saying that their "source in Europe is based in part on [their] own proprietary survey" and adding that they "are not using anyone else's survey data." In the coming months, I hope to put together a larger global picture of new retail video games sales, and at that time we can revisit these extra-retail figures to see if one can estimate the full size of global content market.