The Australian Financial Times has published a story on how to shut a game shop without getting an refund from the Australian government.
The article cites figures from the Federal Trade Commission and the Australian Games Retailers Association that show online gaming revenue in Australia was $3.4 billion in the 12 months to June 2018.
It says the figure includes both physical and digital sales, which makes up about $3 billion of the total.
The report also suggests that digital sales have fallen by more than $500 million in the last 12 months.
The paper says a review of data from the Games Industry Council (GIC) found digital sales in Australia fell by more that $250 million in just the 12-month period to June 2019.
A spokesperson for the GIC told the Financial Review that the organisation was unable to provide data for the period to 2017, but was working with the Australian Competition and Consumer Commission (ACCC) to get more data.
“We’ve got a pretty good idea of how much of that is digital,” the spokesperson said.
“There are some other things we’re not so sure about.”
GIC chief executive Mark Williams told the newspaper that the group had been advised by the Federal Government to stop its online sales, but said the industry was in the midst of “reforming” its business model.
“I think we need to be looking at our business model and thinking about how we’re going to get to that future, rather than thinking about shutting down,” Mr Williams said.
Mr Williams also said the online business model was being challenged by the digital game industry.
“The reason we have this business model is that it’s not really working,” he said.
A spokesman for the Federal Communications Minister, Mitch Fifield, told the paper that the Federal Minister for Communications, Media and Arts Andrew Barr, had been briefed on the issue.
“A number of internet retailers are already reporting significant losses,” the spokesman said.
“[Barr] has asked the Australian Communications and Media Authority (ACMA) to review the industry’s practices to determine if they are compatible with the law and, if so, to recommend ways to implement new, tougher rules.”
A spokesman from the ACCC said it had received “a number of inquiries” from the industry on the issues.
“As a result of these inquiries, we have received a number of comments, including from the retail industry, and are responding,” the ACCCC spokesman said in a statement.
“In this process, the ACCCA has also provided a number on the ACCAC website and the ACC CBA has provided a response.”
The ACCC has been asked to provide an estimate of how many Australian businesses are online and online-only, or online and in-store.
The regulator is currently reviewing its rules around online advertising and has also asked the ACC to provide a “complete list of all advertising providers”.
“We have asked the AEC for a complete list of online retailers and their ad units,” a spokesman for ACCC chairman, David Thodey, told ABC Radio National.
“It would be inappropriate for us to provide this information.”
‘Not a viable business model’ The report from the ATS suggests the online gaming industry has been forced to consider whether it should be allowed to operate without a licence.
“These are all matters that we need the Government to consider,” the report says.
“They’re not a viable or sustainable business model for the online games industry, it doesn’t work, and the Federal government has got to act on this.”
The Australian Games Industry Association (AGIA), which represents the industry in the ACT, said it was aware of the report but had not seen it.
“AGIA has been working with industry partners for the past two years to develop the industry-friendly and open-minded model for online gaming, which will help protect the interests of consumers and protect the Australian game industry,” a spokesperson said in an emailed statement.
The Australian Gaming Association said it also supported the regulator’s work.
“While the ACC has the authority to act in this area, it’s important to remember that this is not an industry-specific regulatory matter,” the AGA said in its statement.