More work, more female employees but still little support from the state: the video game industry in Italy

Iidea unveiled in Rome, in the presence of Senator Lucia Borgonzoni, Undersecretary of State at the Ministry of Culture, the annual report 2022 on the gaming market and industry in Italy.

This year the association photographed at the same time two segments of the sector: the consumption of video games and the creative industry of our country.

The market

The video game market in Italy, after pandemic years of exponential growth, recorded a slight decrease of 1.2% compared to 2021, going from 2 billion and 243 million to 2.2 billion euros. Second Marco Saletta, general manager of Sony Interactive for Western&Southern Europe and also president of Iidea, “our market is in line with the findings of the European ones. Almost everyone has suffered greatly from the lack of next-generation consoles. However, the reading of the data made by Iidea on 2022 is particularly positive, over the course of 3 years the value stabilized at 2.2 billion euro, revealing that, even in the post-pandemic, video games remain an indispensable source of entertainment for Italians. Especially if I use it on mobile devices”.

As Saletta pointed out, the decline in sales was influenced by the difficulty of procurement of next generation consoles: hardware stands at 409 million euros, with a drop of 7.7% compared to the previous survey. Software, on the other hand, stands at 1,791 million euros, with a slight contraction of 0.5%. Again Saletta: “Hardware weighed heavily in the balance of the year 2022, but what we are seeing now is a strong demand for new generation consoles. Evaluate what will happen between now and the end of 2023, with the recovery of the console supply chain, it is difficult. But we have to be optimistic”.

Even if the digital format software market remains dominant and covers 42.3% of purchases on consoles and PC, however, we see an interesting increase in the sale of products in the physical version in retail stores, 15.7%, which rises by 5.2% compared to 2021, while the remaining 42% is represented by apps. Saletta reminded us that “Italians like to shop in stores and those from our country are particularly good at generating traffic in stores, enticing and interesting customers. Also, the steady increase in video games available certifies the variety of titles played. This is a trend that we had already noticed last year”.

Customers

32% of the Italian population between the ages of 6 and 64 used video games in free time: 14.2 million people, down on the 15.5 million of the previous year. The contraction is due to the decrease in the number of computer gamers, in line with other European markets.

The Italian gamer is on average 30 years old, 80.9% are of age and 19.1% are aged between 6 and 17 years. Even if observing the breakdown of the public by age range, the greater weight of the segment between 45 and 64 years (24.6%) and that between 15 and 24 years (24.0%) can be seen, the figure for adults of 80.9% is very interesting because it reflects the Istat surveys on the Italian birth rate at historic lows. According to Saletta, “data does nothing but represent the company. The gaming model is no exception. However, the important thing is to always offer suitable and certified products for different age groups”.

Finally, women represent 42% of the gaming public e the average playing time has decreased compared to the previous year, 8.7 hours a week become 7.52, returning to pre-pandemic levels. Italians mainly play on mobile devices (69.7%), followed by consoles (45.8%) and PCs (38%).

Interview

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by Alessandra Contin

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The gaming sector in Italy

Although the Italian video game industry remains small, in one year it has literally doubled the number of employees, with a +50% compared to 2021 which brings the professionals employed to 2400. Luisa Bixio, CEO of Milestone and vice president of Iidea, explained to us that “this growth is the effect of several factors. The market is growing more and more, and this leads investors and entrepreneurs to look with interest at the video game segment. The institutions have begun to support the market, giving a competitive boost, creating interest also for foreign investors. There is a long way to go, but the start has also been noticed internationally. Furthermore, some of the already structured companies, such as Milestone, are expanding a lot and over the years some people have left who, already having a background, have started new studios which are slowly growing in turn”.

On this front, Iidea has done a communication job on the industry both at an institutional level and in the world of international videogamesBixio told us again: “International publishers have invested in Italian studios, starting from scratch or acquiring existing structures, and then they are investing in growth and specific training courses are facilitating the search for people, young but with qualified training”.

The entrepreneurial fabric nationwide is moving from the startup and micro-enterprise phase to the phase of SMEs, small and medium-sized innovative and creative enterprises: “Even if our industry is growing, we cannot yet speak of consolidation. I believe that we will be able to talk about stability of the sector when we have an industry 10-20 times bigger, with companies of hundreds of people and smaller studios, in a synergistic environment of collaboration with universities, institutions and companies. As an association we are working to achieve this goal”.

Companies with more than 10 employees are increasing, which are 39% of the total, turnover also grows (+30% compared to 2021), which stands at 130-150 million euros. 24% of employees in production are women, while 83% are under the age of 36. Another interesting figure is the female representation of the sector of 24%, 3 points higher than the European average, as confirmed by Bixio: “The presence on the Italian territory of numerous small-sized teams, many of which were founded in the last 3 years and with a young average age, it gives more girls the opportunity to find a professional outlet in this sector. In small studios, co-founded together with peers. Also, in studies of this size one sees a better balance between artistic or marketing functions, with a large female presence, and more technical and programming functions”. Again: “An interesting fact that we can mention is that girls and boys who play video games are 3 times more likely to pursue a STEM career than those who don’t”. The main destination market for Italian production it is Europe with 43%, followed by North America (40%) and the Asian markets and Australia.

However, the major issues remain investments and capital: the majority of operators (86%) continue to relying on personal capital to finance activitieseven if the support of public institutions has increased, going from 24% in 2021 to 29%, and of private companies, going from 9% to 19%.

In particular, the public impact in the sector is beginning to be glimpsed, such as direct effect of the implementation of the tax credit and some important international acquisitions that recently involved some Italian studios: “I believe that the support of the institutions could be the key – Bixio told us – Developing a video game in Italy can require investments ranging from hundreds of thousands of euros to tens of millions. While in France, England, Canada and Germany there are tax credits at 35%, with limits per product or company infinitely taller than oursclearly the competitiveness of the Italian industry is reduced”.

In short, according to the vice president of Iidea, “we must make the institutions understand that investing in this industry means privileged work for our young people and 90% of turnover abroad. It means attracting investors to our companies and opening new development studios. The talents are there, the studios are growing: if the institutions follow us, more and more investors will arrive, creating a virtuous circle”.