Consumers spent a record amount in the UK video games market in 2020, with the sector valued at £7bn for the year – according to Ukie’s 2020 Consumer Market Valuation.

The result marks a 29.9 per cent increase on 2019, and over £1bn higher than 2018’s previous record total of £5.7bn.

As reported by Licensing.biz’s associate title, MCV UK, game software sales across all categories rose 18.5 per cent, from £3.8bn to £4.5bn, with digital sales encompassing 85 per cent of all software sales. Despite many shops being closed for much of the year due to the pandemic, sales of new boxed games grew 7.1 per cent – reversing the downward trend of recent years.

Games hardware sales had a record year, reaching £2.3bn, a growth of 60.8 per cent year on year, thanks to the launch of the new consoles, as well as accessories and PC component sales.

The launch of the PlayStation 5 and Xbox Series consoles pushed console hardware sales up 74.8 per cent year on year, according to data from GfK Entertainment. Despite the new consoles, it’s actually the Nintendo Switch that generated the largest share of console hardware revenue. The March 2020 release of Animal Crossing: New Horizons has been a major driver of this success.

PC games hardware sales had a good year too, driven by the move to home working. VR hardware sales meanwhile grew by nearly a third to £129m, thanks in no small part to accessible, standalone headsets such as the Oculus Quest 2.

The game culture section of the valuation (revenue from activities associated with games) also grew to £199m, fuelled by a 22.4 per cent increase in toys and merchandising revenue  – countering the COVID-related shortfalls in other categories.

The February release of the Sonic the Hedgehog movie helped defend the movies and soundtracks category from the worst of the pandemic, with an overall decline of just 22.2 per cent.

For the first time, this year’s valuation includes a measurement of streaming and game video content revenues. UK consumers spent £45.6m through donations and subscriptions, making up for the obvious decline in physical event revenues.

“The latest consumer market valuation confirms just how valuable games proved to people across the country during one of the toughest years of our lives,” said Dr Jo Twist OBE, CEO of Ukie.

“The games sector is a growing, resilient and critical part of the UK’s successful creative industries sector. We all know how important entertainment, technology and creativity have been over the last year. The London Games Festival over the next 10 days will showcase and connect the fantastic leading games businesses right here in the UK with global audiences, investors and publishers, and will demonstrate games’ power to connect, entertain and innovate.”

The valuation was announced at the start of this year’s London Games Festival, run in partnership with Film London and Ukie. The digital event runs 19 March to 28 March, supported by Sony Interactive Entertainment, Xsolla, CCP Games, Hiro Capital and Here East.

The 2021 edition of the event features over 100 games, participation from 400 companies from 25 different countries – with over 1,000 professionals connecting online for business meetings, investor pitches and roundtables.

Highlights from the event include the LGF world stage, featuring the festival’s daily videos and premieres. The full schedule of 60+ broadcasts is available from today from the event’s website. A range of content will be made available free to everyone, from music performances and industry panels to special documentaries and launches.

For the first time, the festival will feature an Official Selection of 40 games from around the world, representing quality, innovation and diversity. The selection will highlight creative talent across four categories: Made In London, Narrative Excellence, International Innovators and Pick Up And Play. A dedicated website for the Official Selection is found here, and the festival has created daily videos supporting each game on the World Stage as well as digital retailer promotions.

The festival will also have a focus on mental health, through a partnership with games industry charity Safe In Our World and its Safer Together Campaign. The campaign offers a public Discord, which will launch during the festival and will provide a platform for gamers and the industry to connect, discuss games and be a safe space for all to talk.

The Now Play This programme will feature an additional 25 games and experience. Taking place from March 25th to 28th, the programme centres around the climate crisis, and how interactive experiences can inform and educate. Now Play This includes online talks and workshops, and a number of in-game activities – such as a ‘flight’ to the festival using Hosni Auji’s Airplane Mode.

Overall, this year’s event will include over 400 games businesses, the biggest showing the festival has seen since the festival started as a physical event in 2016.

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This was reported on by Chris Wallace,  MCV/DEVELOP’s staff writer, who joined the team after graduating from Cardiff University with a Master’s degree in Magazine Journalism. He can regrettably be found on Twitter at @wallacec42, where he mostly explores his obsession with the Life is Strange series, for which he refuses to apologise.