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June 18, 2012

UK computer and gaming retail market to see drop in sales through 2013, Report

Declines in disposable income, higher youth unemployment levels and lower consumer confidence negatively affected sales

By CBR Staff Writer

UK computer and gaming retailers are forecast to experience a 3.5% decline in sales per annum over the five years through 2008-13, according to a report by industry research firm IBISWorld.

The report on the Computer & Gaming Product Retailers industry, however, reveals that sales across the computer and gaming retail market in the UK will report a modest recovery over the next five years to 2017-18.

IBISWorld industry analyst Alen Allday said, "Sales during this period were driven by trends in real household disposable income, consumer sentiment, higher youth unemployment, internet access and computer usage, online shopping and competition from department stores".

"While demand for computer and gaming equipment will remain strong, sales growth will be hindered by mounting competition from external players such as department stores and the flow-on effects of austerity measures by the UK government," Allday added.

IBISWorld stated the Computer & Gaming Product Retailers industry is characterised by a few dominant high street retail operations and a number of small, niche operators.

The industry’s four largest firms combined made up 80% of the market share, and major companies include Dixons, GAME Group, Sony UK and HMV.

Despite tax increases, lower disposable income levels and weaker consumer confidence, the industry will experience higher levels of online sales as more consumers move to the internet for their shopping needs.

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The research noted the UK Computer & Gaming Product Retailers industry has faced considerable change over the past decade with continued advances in technology, revolutionising the gaming segment of this industry, where consumers were offered different ways to buy and play video games.

Driven by the launch of boxed technology from console manufacturers, the gaming market have experienced continued demand for virtual or digital downloads, which gained in popularity and now account for about 10% of the video gaming market.

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