Western European Game Market Estimated at €16 Billion ($23 billion)

June 08, 2011

The latest forecasts from DFC Intelligence estimates the Western European market for games was 23 billion dollars (about €16 billion) in 2010. For the next five years, DFC expects this overall figure will not grow significantly. Instead, there will be a growing shift in distribution from the traditional physical model to digital sales. According to DFC, in 2010, digital distribution of games on the PC and console systems in Western Europe was $3.4 billion. This is expected to grow to $7 billion by 2016.

Historically the Europe game market has not performed up to its full potential because differences in culture, language, laws and infrastructure have limited access to many markets. Online distribution definitely opens new opportunities. European companies like Gameforge and Bigpoint are now earning over $100 million in annual revenue from games that are distributed entirely online. However, like physical distribution, online distribution in Europe presents many challenges. For one, payment processing across Europe is extremely fragmented.

Because of the importance of understanding the emergence of digital distribution in the multiple European markets, DFC Intelligence has partnered with Skrill Holdings and Live Gamer to provide some on-going in-depth analysis of the major challenges and opportunities. This research is designed to take a detailed look at payment methods and how they vary by country.

Much of Europe does not have credit cards and instead relies on payment methods such as debit cards, bank transfers, direct debit, payment cards, mobile payments and others. Just in Europe, a company like Bigpoint offers 90 different payment methods with anywhere from 5 to 18 per country. Beyond just multiple payment methods, chargebacks and frauds are major issues of concern.

Unless a company is large and well established in a market, payment processing in Europe essentially requires working with a payment solutions provider that can get most of the payment solutions controlled in one place. “Companies like Skrill Holdings offer over 100 different payment methods in 200 countries around the world,” said David Cole, analyst at DFC Intelligence. “These types of all-in-one solutions are becoming critical to success in developing global online distribution.”

Working with co-contributors Skrill Holdings (operating payment provider Moneybookers), and Live Gamer, DFC Intelligence examined actual transaction data from over 300,000 consumers in 27 European countries. A survey was also conducted of over 2,800 PC gamers in Europe and it was found that over 76% had purchased a full game via digital delivery.

DFC Intelligence is publishing findings from this research in multiple reports throughout 2011. Another major ongoing research initiative is looking at Eastern European markets especially Russia. For more information about this research please contact Ozzie Monge at omonge at dfcint.com or signup to receive briefings at https://www.dfcint.com/DFCDossier/signup.php.

About Skrill
Skrill Holdings operates Moneybookers.com, one of Europe’s largest online payments systems and among the world’s largest independent e-wallet providers with over sixteen million account holders. This simple e-wallet enables any customer to make online payments conveniently and securely without revealing personal financial data, as well as send and receive money transfers cost-effectively simply by using an email address. Moneybookers’ worldwide payment network offers businesses access to over 100 payment options in over 200 countries and territories through just one integration.

Founded in 2001, Moneybookers was the first e-money issuer to become authorized and regulated by the FSA. In 2007, Investcorp Technology Partners undertook the buyout of Moneybookers from its founders. Today more than 80,000 merchants are registered with Moneybookers.com, including global partners such as eBay.com, Skype and Thomas Cook.

About Live Gamer
Live Gamer (www.livegamer.com) provides a complete monetization solution for global micro-transaction-based businesses. Spanning online games, digital entertainment, and social networks, Live Gamer’s advanced offerings go beyond billing to drive core business metrics,optimize new transaction-based revenue streams, as well as drive end-user engagement. Combining its micro-transaction platform, catalog management, storefronts, merchandising and anti-fraud solutions, scalable publisher support and international payment gateways, Live Gamer’s technology has been adopted by leading publishers in gaming, social and entertainment including CCR, Electronic Arts, Namco Networks, REAL Networks, Sony Online Entertainment and THQ, supporting over 90 million users in 23 countries.

About DFC Intelligence
DFC Intelligence (www.dfcint.com) is a strategic market research and consulting firm focused on interactive entertainment and the emerging video game, online game, interactive entertainment and portable game markets. Since 1995 DFC has published in-depth strategic market reports and subscription-based research services. DFC research is used by more than300 leading companies in over 30 countries worldwide.

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