1. INTRODUCTION
2. EXECUTIVE SUMMARY
Video games drive overall performance
Lack of blockbuster products in traditional toys and games
Shorter shelf-life concerns
Video games, 2004 and beyond
3. MARKET PERFORMANCE
Performance driven by video games
New products and old favourites for Christmas 2003
Intellectual property piracy is rife
2003, midpoint of the current video game cycle
Hong Kong, the largest toys and games exporter in the world
Table 1 Retail Sales of Toys and Games: Value 1998-2003
Table 2 Retail Sales of Toys and Games: % Value Growth 1998-2003
Table 3 Toys and Games Company Shares 2002-2003
4. TRADITIONAL TOYS AND GAMES
4.1 SECTOR PERFORMANCE
Lack of blockbuster products, threatened by video games
Biggest share goes to multinationals
Disney toys licensed to Playmates Holdings Limited (HK)
Pre-school toys grow strongly
Educational/scientific toys bolstered sales of activity/construction toys
Model vehicles, to play with or to collect
Limited home space restricted indoor games growth, but helped outdoor games
Dolls/figures struggling
Soft/plush toys not only for kids
Infant toys influenced by low birth rate
Hong Kong toymakers bank on technological edge over rivals from mainland China
Table 4 Retail Sales of Traditional Toys and Games: Value 1998-2003
Table 5 Retail Sales of Traditional Toys and Games: % Value Growth 1998-2003
Table 6 Traditional Toys and Games Company Shares 2002-2003
4.2 NEW PRODUCT DEVELOPMENTS
Summary 1 Traditional Toys and Games New Product Developments 2002-2003
4.3 RETAIL DISTRIBUTION
Toys specialists and department stores dominate
Hong Kong Toys R Us—franchised by Li & Fung (HK)
Table 7 Retail Sales of Traditional Toys and Games by Distribution Format: % Analysis 1998/2003
5. VIDEO GAMES
5.1 SECTOR PERFORMANCE
Video games cycle – every 6 years
Hardware competiton focuses on price war & online gaming
Game oriented software
Summary 2 Number of Software Titles per Hardware Console (as of December, 2003)
Established franchises
Besides software innovation, sales growth also depends on ageing of game players
Growth also depends on the installed console base
SWOT analysis for video games
Significant differences between the three video game consoles
Summary 3 Significant Differences Among the 3 Video Game Consoles
Three players dominate
Sony hit the shelf with white console and new software in Chinese
Summary 4 New PlayStation 2 Software Title in Chinese
Online games show small share of PC game software in 2003
Online gaming strategies – Microsoft is the most aggressive
Electronic Arts Inc the major software player in video games
Soft-World Hong Kong Ltd, leader in PC games
Software piracy –45% of software sold in Hong Kong is pirated
Nintendo wins case against Hong Kong copying device distributor
Table 8 Retail Sales of Video Games: Value 1998-2003
Table 9 Retail Sales of Video Games: % Value Growth 1998-2003
Table 10 Video Games Company Shares 2002-2003
5.2 NEW PRODUCT DEVELOPMENTS
Sony release PSX - a new PlayStation device
Additional information for Sony PSX specification
Plans to launch Sony PSP to compete with Game Boy Advance in 2004
Microsoft unveils much-anticipated action role-playing game
Software development depends on movies and television
Konami selling mobile phone games in Hong Kong
Summary 5 Video Games New Product Developments 2003-2004
5.3 RETAIL DISTRIBUTION
Table 11 Retail Sales of Video Games by Distribution Format: % Analysis 1998/2003
6. FORECAST MARKET PERFORMANCE
Growth to be driven by video games
Industry trends for traditional toys and games
Further price cuts expected in video games
The next video games cycle –Sony PS3 & Xbox 2 in 2006?
If so, the up-down-up growth rate for video games
Table 12 Forecast Retail Sales of Toys and Games: Value 2003-2008
Table 13 Forecast Retail Sales of Toys and Games: % Value Growth 2003-2008
