Europe isn’t always viewed as a dynamic market. But a new report says that the digital game market is expected to grow 89 percent to $4.2 billion by 2015. That’s a healthy growth rate compared to the rest of the world, and it shows that game publishers could do more to milk the territory for overlooked revenues.
Europe’s revenue from digital distribution of games hit $2.2 billion in 2010. That number could be higher, but the European market is actually under-served when it comes to digital content, said David Cole, analyst at DFC Intelligence, in an interview.
“Europe is highly fragmented,” Cole said. “Our growth forecast assumes that the market will get better at serving the gamers who want to buy online.”
The study was created by market analyst firm DFC Intelligence working with data from Skrill Holdings, owner of digital payments firm Moneybookers.com, and virtual economy firm Live Gamer. The findings will be presented Thursday at 1:30 pm in a Monetizing the European Market for Virtual Currency panel at the Game Developers Conference.
Europe is hard to target with a single online game distribution channel. That’s because there are different online stores and many different payment methods. Those idiosyncrasies may it hard and costly to reach all of the gamers who want to buy games digitally. The payment systems have to be worked out country-by-country, said Alexander Brutin, senior vice president from Moneybookers.com, which offers 110 different payment methods.
The survey covered responses from 2,800 PC gamers in Europe. Of those surveyed, more than 76 percent had purchased a full game via online delivery. Andrew Schneider, president of Live Gamer, said that gamers are willing to buy games online and use microtransactions. But the biggest obstacle to overcome is the ease of payment processing. If there are more flexible payment options beyond credit cards and debit cards, the Europeans are more likely to buy. Schneider said he was very encouraged by fast growth in Eastern Europe. (Pictured above is World of Tanks, a popular new online game from Europe).
“It’s a no brainer for online game companies to expand in these regions,” he said.
One of surprises in the report is that some countries are extremely active when it comes to buying games online. In Romania, for instance, there is a sophisticated broadband infrastructure and payment system. On average, Romanian customers make five transactions a year at an average of $24 each. That’s pretty high. By comparison, the U.S. is about $8 a year, the United Kingdom is around $12 a year, and the four Scandinavian countries are $20 per year.