Nintendo ‘comeback’ sees games console market have best year since 2011

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A person dressed as the Nintendo character Mario waves at a pop-up Nintendo venue in Madison Square Park, March 3, 2017 in New York City.

Consumers spent more on games consoles and related services last year than at any time since 2011, according to a report.

This was largely thanks to “Nintendo’s record-breaking comeback,” although Sony remained the dominant player, an IHS Markit note released Wednesday said.

In 2017, $41 billion was spent on hardware, games content and services, representing an 18 percent year-on-year rise, the study showed. This was the highest figure since 2011, when spending on the games console market hit $46 billion.

Spending on hardware specifically was up 33 percent in 2017 following the launch of the Nintendo Switch, Sony’s PlayStation 4 Pro at the end of 2016, and Microsoft’s Xbox One X, which had higher price tags than existing consoles.

Content spending reached $23.6 billion and represented the largest segment of the market.

Subscriptions to gaming platforms such as Xbox Live Gold and PlayStation Plus grew 11 percent year-on-year to $3 billion. Consumers pay a yearly or monthly fee to join these subscriptions services, which offer free games and the ability to play online against gamers worldwide.

The increasing importance of subscriptions to gaming, and users downloading titles rather than purchasing physical copies, shows the shifting sands in the industry.

“We are now approaching a tipping point in consumer behavior, where the digital share of full game sales has started to accelerate away from the transitional norms,” Piers Harding-Rolls, head of games research at IHS, said in the report.

“This accelerating picture and the rapid shift to games-as-a-service monetization models is fueling growth in content spending.”