The other day we hinted about the importance of Computer Games to the new economy.

Patrice Geoffron in his report to BASCAP, destined for the heads of Governments throughout Europe, unfortunately omitted to include the value of the video games industry in his report, even though in the most recent IFPI report, Mr. Kennedy, the Chairman of IFPI recognised that Games had overtaken music as the number one selling media commodity.

Source 1 IFPI 2010 Digital Music Report

Today, we are not going to analyse the discretionary household expenditure portion of the 267 million or so games that have been sold (yearly/aggregated)  in the EU since 1998.

Clicking in the above will download a copy of the source excel file

Or the 60 million kilos of games missing from the PRA 36500 datasets.

At 130 grams per game, (DVD, case and booklet) we make that 461,538,461 computer games that were shipped but never manufactured.) Yeah right!

Must have been pirated games that were sold. (I’ve heard of commercial in confidence but quite frankly this is ridiculous…… I don’t see any valid reason why the numbers can’t be supplied ten years after the event…. surely the competition wouldn’t learn anything valuable ten years later……)

But let’s not discuss that yet….

Nor will we dwell on the growing sales of computer consoles designed exclusively for gaming.

Or why console sales in the UK appear to be falling in comparison to the market growth in the US. (Because of course, everyone knows, you can’t pirate a consol… it’s hardware.)

Nor will we spend any time discussing the apparent huge boost in revenues to the games industry, companies like Sony, Microsoft,
Nintendo, on the occasion of the launches of the DS, Wii, XBox360 and of course the PS-3 and how those billions of dollars curiously resemble the drop in the music numbers.

No, we’re not going to talk about all that. Everyone already knows all that, except perhaps M. Patrice Geoffron (who doesn’t believe that companies like Microsoft and Vivendi and their publishing products, should be included in his report on job loss in the EU).

Today, we will travel geographically southwards to the forgotten continent. The antipodes, or for persons not located in between the UK and the Netherlands, Australia; and backwards in the fourth dimension to 1979.

We do this to find a set of statistics that are (mainly) isolated from possible cross border purchase/sale statistical contamination principally through Australia’s distance and subsequent shipping costs.

With a population of approximately twenty-two point six million people; Australia quite often technologically benefits in it’s physical remoteness and small population base by being selected as the test bed for new technologies, (cellphones in the early eighties) and occasionally we are not (lack of micro computers in the late seventies). In fact, we were the last ones to get a Radio Shack in the 70’s.

What did happen is that when Radio shack did finally open in Oz, Dick Smith (a competitor) opened shop
simultaneously and with the ensuing competition, it appeared that everyone could afford to buy an Atari, a TRS-80, a Pet Commodore, an IBM clone or an Sinclair ZX.

Australia went computer mad. (Although with TIME magazine voting the IBM 5129 the Man of the year…, possibly it was the whole world that went comuter mad.)

“Music? Don’t bother me woman, and turn down Tina Turner. I’m writing a program to classify all your recipes.”

The eighties were amazing. We went from a nation with one computer per eleven thousand people to one computer
per ten households in less than ten years.

In 1983 at the Koltai residence, in the distant countrified remote city of Darwin (near Kakadu), we had a
Ferranti, an Olivetti, an ATT&T 3B2 a DRS300 an NEC HO2 and my favourite, the Phantom Chess Challenger (which was a chess game with XY self moving chess pieces and not technically a computer – with keyboard, but it used to beep, and it’s a game, so it’s included.)

Each computer had a variety of games installed, depending on the computers capabilities and operating system.

The NEC had an advanced Noughts and Crosses, the The 3B2 used to dial-up Minerva and we would play Zork online (at the blindingly fast speed of 150 bps…..), before Infocom released Zork for IBM at the bargain basement price of only $79.95.

As Australian households warmed to their new technical toys (that kept the kids busy for hours – unlike music
that wouldn’t keep them out of mum’s hair for more then ten seconds…..) software consumers overnight, became wannabe game programmers.

SIMTEL20, the White Sands facility that was volunteered for civil use by the US government in 1979
suddenly became a repository for thousands of Amiga, IBM and Apple users.

Each of these users purchased a modem and called their local BBS; which of course in Darwin, was “moi”. My entire
role in life in those days was to get the best software so that my users could “play”.

Definition of the best software?  Sure, anything that was public domain that was a utility or game that had source code.

The public had computers and they wanted to learn how to emulate Bill Gates; and each one purchased sound cards,
more memory, a Borland compiler or two, advanced 640×480 graphics cards, larger monitors, modems and for the kids… ahem ahem, some games.0

Exit the past, arrive back in the present, Saturday Afternoon, the 1st of May 2010.

On eBay in Australia there appears to be between fifty to sixty thousand second hand Video games available for sale on a rotating basis with each listing taking between seven and ten days to finalise. (Finalise does not necessarily mean a sale. Listings can expire with no bids thereon.) That produces a turnover of around 6295.8 games per day.

Ebay Category Games
Rank	Platform	On Offer
1	PC	12,047
2	PlayStation 2	9,120
3	PlayStation 3	7415
4	Xbox360	6,725
5	Nintendo DS	5,956
6	Wii	5,706
7	Xbox	2,423
8	PlayStation	2,351
9	PlayStation Portable	2,131
10	Nintendo 64	1,412
11	Mega Drive	1,168
12	SNES	1,149
13	Game Boy Advance	927
14	GameCube	914
15	NES	809
16	Game Boy	701
17	Master System	673
18	Atari	332
19	Game Boy Colour	297
20	Saturn	195
21	Apple	130
22	Dreamcast	120
23	Not Specified	91
24	Game Gear	88
25	Commodore	59
26	Mega CD	12
27	Intellivision	6
28	Colecovision	1
	Saturday 1/May/10	62,958

To calculate the average value, we traveled to the other side of the world to a popular games pricing site, http://videogamepricecharts.com used by secondhand retailers globally as a price indicator.

(Whose principal audience according to Alexa is :Based on internet averages, videogamepricecharts.com is visited more frequently by males who are in the age range 18-24, have no children, are college educated and browse this site from school).

Game System	Total Vendors	Avge Price	Total Games	Avail Second Hand
Atari 2600	774	58.97	539	414
Atari Lynx	102	15.23	84	63
Gameboy Advance	3846	8.19	1088	1064
Gameboy Color	3192	5.44	960	941
Gamecube	2288	8.39	646	605
Mac Games	292	24.23	147	132
Neo Geo	62	190.74	55	45
NES	2863	63.70	814	802
Nintendo 64	1237	8.97	338	338
Nintendo DS	3860	14.05	1231	1205
PC Games	926	28.68	406	378
Playstation	4972	7.46	1309	1308
Playstation 2	7030	7.39	1921	1908
Playstation 3	1322	27.49	457	456
Sega Dreamcast	992	10.92	300	280
Sega Genesis	2609	8.64	713	706
Super Nintendo	2779	24.59	727	726
Wii	2440	17.73	779	770
Xbox	3564	5.37	1002	938
Xbox 360	2254	19.52	679	673
3DO	340	16.15	172	156
Atari 5200	104	21.40	85	63
Atari 7800	98	11.51	85	45
Colecovision	194	17.07	120	108
Commodore 64	352	22.09	581	274
Intellivision	221	14.61	113	111
Jaguar	87	20.95	69	50
PSP	1520	11.72	542	524
SegaGear	545	5.88	303	232
Sega CD	414	11.52	160	143
SegaSystem	391	12.87	318	180
Sega Saturn	719	16.58	260	253
TurboGrafx-16	260	27.97	118	115
Virtual Boy	40	76.45	17	16
	52689	$ 24.78	17138	16022

Where we discovered that the average price for a second hand computer game from N=844,183,158 (avail second hand games times total vendors) was $24.78 (USD),

If we accept the premise that 54.8%[i] of eBay listed items conclude successfully in an average of 7 days, and; eBay in Australia has 3.2 million registered users;

then the Australian eBay market in used computer only computer games totals $ 33,493,301.51[ii] per annum or $ 10.47 per eBay user. ($1.52 per capita).

If we allow for a similar interest by non eBay users (at a rate determined to be 69% of the total Australian population with a PC at home) and we attribute the satiation of their interest via more traditional low cost reselling venues, i.e.: flea markets, garage sales, classifieds, local notice-boards, friends and pawn shops, then suddenly, we get to $ 49.65 for every household in Australia, with a computer, per annum.

If we add that to Australia’s wholesale music purchases per household…

Remember, this is for the entire household, and not per capita.[iii]

	2002	2003	2004	2005 ^	2006	2007	2008	2009
Music Wholesale $ (AUD)	609,534,000	646,002,000	606,970,000	520,267,000	483,915,000	422,247,000	371,448,000	366,868,000
AU Households	7,505,674	7,645,366	7,783,687	7,920,842	8,058,248	8,186,752	8,315,589	8,444,779
Per Household	$ 81.21	$ 84.50	$ 77.98	$ 65.68	$ 60.05	$ 51.58	$ 44.67	$ 43.44

As Mr. Spock would say….                     “Fascinating”.

The argument is of course slightly flawed because we must allow for;

• not everyone with a computer wants to buy second hand games, and;
• most persons with a computer and inclined to play games are no doubt aware of the cost benefits of
  purchasing via eBay and would therefore lost likely do their shopping online.

However, it does make for an interesting thesis and as my regular readers know…. It’s at least as credible as the Music Industry claims that piracy has damaged their revenue model.

In closing to give you a little more thinking music…  (Leonard Cohen “Everybody knows”)

Let us return to that N number….. 844,183,158 second hand games for sale, globally.

The company states that they obtain their pricing from several sources:

The prices shown in the table above are the average price for each game over the last 90 days on eBay.com,
Amazon.com, Half.com, and JJGames.com. The prices are updated daily. The price is what an
individual would receive for buying or selling a used copy of the game.

We decided to use the same numbers as we used from eBay Australia, above.

i.e.: 54.8% of all games sell within seven days, however, we thought we would make it 30 days on a global basis, in honour of the recession.

The total? $10,130,197,896 for second hand games ONLY. No consoles, no attachments. Just pre-loved, aging
computer games.

That’s a global per capita of around $1.40.

Makes one think about those claims of computer piracy being the reason for the drop in sales numbers for the music guys…….

The new games and new software that’s been sold in the EU since 2000?

That’s a story for another day.. and what a story!