Argentina video games market: 9% CAGR growth forecast between 2012-2017

Press Release   •   Jul 17, 2013 15:09 BST

In 2012, the Argentina video games market was led by Sony Argentina with a 46% value share, followed by Latamel Inc with 18%. Although Sony Argentina led throughout the review period, due to import restrictions, its value share fell by three percentage points on the previous year; this represented the largest drop in share within the category. Sony's continued leadership is explained by the success of PlayStation 2, introduced in 2006, within video games hardware. Within video games software, Sony Argentina SA led the category with a 19% value share, followed closely by Electronics Arts Inc with 18% and Activision Blizzard Inc with 17%.

Video games posted 9% current value growth in 2012, well below the 31% CAGR seen over the review period. This performance was a result of a mixed performance seen across the categories within video games – including a fall of 18% in video games software due to import restrictions and a 13% rise in video games hardware as household penetration of consoles remains low compared to other products. Although sales of static video games consoles remain relatively high, during the Children's Day period sales grew by only 2% in unit terms, whereas during the same period in 2011 the category registered growth of 8%, according to the Confederation of Medium Enterprises.

The video games category is expected to see constant value sales rise at a 9% CAGR over the forecast period. Even if there is still room for development, it is unlikely that review period growth rates will be repeated in the forecast period, as the video games digital gaming, is increasingly shifting towards a "freemium" model as opposed to the paid model. As imports restrictions are not expected to be softened and unit prices are likely to remain high, piracy will continue to represent a restraint for category development. Local developers and distributors agree that at the end of the review period, 85% of games being used were illegal. Due to import restrictions and tax requirements, most consoles traded in the country are sold through informal channels, namely Mercado Libre, an e-commerce online auction website, or brought from abroad, a tendency that will likely last if Argentina continues with a closed foreign trade policy.

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