The physical entertainment market has returned to growth for the first time since August 2014, thanks to stellar figures from games sales.
According to Kantar Worldpanel, the physical entertainment market grew 2.2 per cent year-on-year, driven by a 26 per cent surge in games sales which offset declines of 5.4 per cent and 4.8 per cent in music and video respectively.
Kantar said this was the strongest overall growth physical entertainment has seen in over three years.
“It’s been a great quarter for games – a real bright spot in the physical market’s struggle against the rise of digital,” Kantar analyst Olivia Moore said.
She added that because of the release of much-hyped Destiny, brand new games – as opposed to second hand – led the charge.
“The market will now be looking to build on its success in the run-up to Christmas, and consoles will have a vital part to play,” Moore said.
“Early signs are promising, with 850,000 consumers looking to pick up either the Nintendo Switch or Xbox One X in the run up to the festive season.
“Argos and Amazon benefited most from the gaming revival, continuing to nip at the heels of market leader Game.”
Amazon remains the largest retailer for physical entertainment, growing share by 0.3 percentage points year-on-year to hold 20.8 per cent of the market.
Meanwhile HMV made the biggest gains: increasing market share by 2.3 percentage points to stand at 18.1 per cent.
“Already the top seller of music, the past quarter has seen HMV leapfrog Amazon to become number one for sales of physical video too,” Moore said.
“The retailer increased its share of the video market with the help of a strong performance in new film releases – up 6.0 percentage points to stand at 22.5 per cent – while Amazon’s share remained flat at 20.2 per cent.”
Beauty and the Beast, Guardians of the Galaxy Vol. 2 and Logan were the top video performers of the quarter, while NOW 97 dominated in music.
“Blu-ray continues to outperform DVD as consumers become more willing to spend more for higher quality content, although its share of the market remains smaller,” Moore said.
“Blu-ray saw 15,000 new shoppers during the latest quarter, with film fans also purchasing the format more frequently on average.”
“In further good news for the video category, digital purchasing nudged the total transactional market – as opposed to streaming or subscription – into four per cent growth, offsetting continuing declines in physical transactional sales,” Moore said.
“This is the best performance we’ve seen for several years. Driven by popular new releases, transactional digital welcomed 600,000 new shoppers in the past 12 weeks, suggesting the sector is making some headway in its battle against declining disc sales and the rise of subscription services.”