MAY 17, 2008 • In school, children learn about the seven continents. When it comes to Australia, the discussion often turns to what exactly is that land mass: the world’s largest island or the smallest continent. This highlights the unique nature of Australia, how exactly is this country/island/ continent classified? Until the 17th century Australia stood apart from the rest of the world where it had been inhabited for thousands of years by an isolated group of indigenous people. In the late 18th century the U.K. claimed Australia and began settling the continent, most notably as a penal colony for British convicts. It wasn’t until 1901 that the six Australian colonies formerly became the Commonwealth of Australia.

Given its historical ties to the U.K., Australia shares much in common with Britain. This extends to Australian tastes in games. As a part of the PAL region, Australia is often lumped in with Europe when it comes to sizing the overall market for games and other entertainment/electronic products.

In physical size, Australia is almost as large as what is historically deemed the continent of Europe (school kids today are still confused about where the Europe continent ends and Asia begins). However, with just over 20 million people Australia’s population density is about 100 times less than that of the U.K. Most all of the Australia’s inhabitants reside along the southeast coast stretching from Adelaide to Brisbane. About 10% of Australians live in the far Western region, concentrated around the city of Perth.

With its historical Anglo-Western culture, much of Australia’s consumer trends are right in line with the U.S. and U.K. That means games like Halo 3 and Grand Theft Auto IV will tend to soar right to the top of the charts in Australia. Of course, that is assuming the game is allowed in Australia. Australia has a different classification system for games run by the Office of Film and Literature Classification. The top rating available for video games in Australia is MA15+, as opposed to R18+ for films and DVD. Any game deemed unsuitable for the MA15+ rating is illegal for sale in Australia. Titles like “Dark Sector” and “Soldier of Fortune: Payback” have run into censorship problems in Australia.

Soldier of Fortune: Payback ran into censorship problems in Australia.

Leaving censorship issues aside, the Australian game market is soaring. The Interactive Entertainment Association of Australia (IEAA) estimates that the Australian game industry reached a record high of $1.3 billion in 2007. In part this is rather remarkable because games are incredibly expensive in Australia. The Australian dollar (AUD) is roughly equivalent to the U.S. dollar (USD). Games typically retail for $100 or more. GTA IV launched at $120 in Australia. A system like the Nintendo Wii which retails for $250 in the U.S. commands $400 in Australia. Nevertheless, as the charts indicate, the per capita hardware purchase rate for video game systems in Australia is not that far behind the U.S. and well ahead of countries like Germany.

The retail scene in Australia will be very familiar to consumers in the U.S. or U.K. Mass merchants, especially Target, have a strong presence in Australia, but the fastest growing chains are U.S. based GameStop/EB Games and U.K. based GAME Group. In 2007 GameStop opened 60 new stores in Australia and revenues soared from $288 million in 2006 to $421 million in 2007. In 2006, GAME Group bought a 16-store Australian chain and in 2007 they opened 35 new stores in Australia.  By the end of 2008, there are expected to be nearly 90 GAME stores in Australia.

With its small population and isolated position, Australian gamers often grouse that they have been ignored as a game market. Neither does it help that the Australia, as a PAL region, is locked into the European release schedule, which is traditionally months behind the U.S. and Japan. Therefore, games are sometimes not released in Australia until well after they have appeared in North America or Europe. For example, Electronic Arts’ highly sought after Rock Band game is not expected to be released in Australia until September 2008, nearly a year after its initial release.

While Australians may not appreciate being lumped in with India, another PAL territory, the latter’s continued growth as a video game market may help boost the prospects for more timely attention to Australia as well.

Source: IEAA

The ranking is based on hardware unit sales per 1,000 citizens

The ranking is based on hardware unit sales per 1,000 citizens