Toys and Games - Portugal

Abstract

EXECUTIVE SUMMARY

Healthy growth but traditional areas still losing ground

Toys and games have continued to deliver healthy growth over the review period. This has been most evident among video games in Portugal, while traditional toys and games have suffered from the fact that the market for them is now more mature. The demand for interactive games and more technologically developed products is the main reason for the success of video games in Portugal.

Gaming arrives

Specialiat retail chains have entered the Portuguese market with highly ambitious plans for the period to the end of 2007. This is potentially a major boost for the video games sector as a whole as, for the first time, Portugal now has a specialised approach to the sector. This offers the potential to attract customers, who have not experienced video gaming as well as reinforcing the loyalty and attracting additional spending from those who are already customers.

Interactivity and technology the key factors

Portuguese consumers are technology friendly and can be classified as first movers in terms of new products provided they are technology-based. This tends to occur more as a way to observe new technology in action rather than to be involved first hand. This approach can prove beneficial for companies addressing the demand for technology-based games. Children are particularly important in this process as they are increasingly taking a decisive role in the purchase decision-making, as well as being more familiar with technology from a younger age.

Mattel, Sony and Ecofilmes the market leaders

Mattel has remained the leader in the traditional toys and games sector, mainly due to sales of its Barbie doll. However, Bratz has started to have an impact on Mattel, which has been losing ground to its direct competitors. In video games hardware, Sony enjoys a virtual monopoly, with its direct competitors finding themselves in a very difficult situation. Sony' s domination is more evident in static consoles than in portable consoles. Ecofilmes has maintained and reinforced its leadership in video game software, due to its diversified strategy.

A bright future for video at the expense of traditional toys and games

The future looks bright for video games that are likely to benefit from the technological convergence set to occur over the forecast period. The growth rate is expected to reach similar levels as were achieved in the review period, making it the most important sector in the industry. The continued performance of traditional toys and games over the same period will also have an impact. The main reasons for the gloomy outlook are the lack of ability to address consumers' technology and interactivity needs and the demographic trend for lower births levels.