Australia's video games industry is set to stagnate during 2013 as a strong local dollar keeps global publishers away and consumers wait for a new generation of game consoles.
Consultancy PricewaterhouseCoopers released revised growth forecasts on Monday for the local industry, claiming that the games market is now set to grow by just 3.4 per cent annually to reach $1.55 billion between now and 2017.
The new figures leave a $700 million black hole if measured against PwC's 2012 forecast which optimistically claimed that the market could reach $2.2 billion by 2016.
The figures also show that the market will stagnate this year, at $1.3 billion, after declining by 20 per cent last year.
The figures come as another blow to a struggling industry, which has seen global publishers shut down local development studios or pull contracts from third-party developers.
Retail stores have also felt the brunt, with UK-based retail franchise Game shutting its Australian operations last year. The closures followed significant drops in game sales during key shopping periods, as well as increasing competition from other franchises and digital games distributors.
PwC executive director Megan Brownlow told The Australian Financial Review that the restructuring of the local games development market was continuing to have an effect on revenues.
"A lot of that has to do with the Aussie dollar being so strong that finding talent here to do the back-end of your development is not as economically viable as it once was when our Aussie dollar wasn't as strong as this now," she said.
"The other big factor - and you see this right across the entertainment and media industry, not just in games - is that it's had really quite subdued consumer confidence. Even though, by external and world standards, our economy is doing quite well, consumers don't feel that and that can curb spending."
Though mobile development is making up an increasing portion of total games sales, major console franchises continue to make up the bulk of revenues in Australia.
Black Ops II, the ninth iteration of the popular Call of Duty shooter games series, pulled in more than $50 million last year from combined Xbox 360 and PlayStation 3 sales, dwarfing the next highest-selling franchise, Assassin's Creed 3 with $20.3 million in local sales.
The federal government earlier this year announced a $20 million fund aimed at encouraging greater game development locally, but industry representatives said the fund would not be enough to entice global publishers back to Australian shores.
Ms Brownlow said that while the anticipated launch of the PlayStation 4 from Sony and Xbox One from Microsoft would help revive the games market slightly, they were unlikely to contribute significant growth past 2014.
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