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Non-Contemporary Gaming Console Sales Soar in Retro-Minded Russia

Enlarged font  Narrow font Release date:2020-01-06  Author:Leonid Orlov, Moscow Consultant  Browse number:413
Note: Nostalgia for 1990's Nintendo clones drives purchases of gaming units that predate fall of the Soviet Union.Game no
Nostalgia for 1990's Nintendo clones drives purchases of gaming units that predate fall of the Soviet Union.

Game not over: Long cast aside consoles return to woo consumers anew.
Photo: Game not over: Long cast aside co<em></em>nsoles return to woo co<em></em>nsumers anew.
Game not over: Long cast aside consoles return to woo consumers anew.

Russia appears to have been caught up in a degree of retro-mania over the past 12 months, leading to a penchant for the purchase of past favourites emerging in several sectors, including cars, audio equipment and – most notably – computer gaming.

In the automotive world, this has led to classic cars from Soviet times – once exclusively available to the political elite of the day – being meticulously restored and fitted with modern engines, selling for twice the price of a brand-new Toyota Camry or VW Passat. In terms of consumer electronics, demand has surged for turntables to play vinyl records, portable cassette radio recorders – admittedly updated with MP3 capabilities and USB sockets – and vintage-style soapbox radios. Many such items are now available from online and offline vendors, with AliExpress and JD.com – two stalwarts of Russia's e-commerce sector – specifically highlighting such products on their bespoke local-language pages.

It is, however, in the computer-gaming market where this trend has been most apparent. The sector, overall, has performed impressively in recent months, with sales in excess of US$110 million reported for January to September last year. Taking a deeper dive into these figures, the fastest-growing segment is the so-called retro consoles, which account for a quarter of the 400,000 items sold in the sector over the period. According to industry analysts, this represents growth of 6% in value terms and 10% in terms of unit sales, while the average price of such items rose 4% to about $300.

It is also a trend that has not gone unnoticed by the big players in the sector, with the retail prices of the Sony PlayStation 4, Nintendo Switch and Microsoft's Xbox One all having been reduced in a bid to maintain market share. It also prompted the launch of a number of budget models, including the CD-drive bereft Xbox S and the Nintendo Switch Lite. Overall, though, Russia's most in-demand console remains the PS4, followed by the Switch, with the Microsoft range languishing far behind.

In many ways, the Russian market has become increasingly polarised of late. On one side, this has seen "wearable" consoles become extremely popular, particularly among commuters. In a country where domestic flights of less than three hours are considered short and where long rail journeys are largely free from internet access, their appeal is obvious. At the other end of the scale, sales of 4K TV sets are also soaring with home gamers keen to get the most immersive display for their Xbox One X or PS4 Pro.

While many of the above trends are reflected in the gaming markets around the world, the demand for retro consoles is more of a distinctly Russian phenomenon. In total, over recent years sales in the segment have climbed 75% in terms of units purchased and 40% in value terms. Typically, the most widely sought out consoles are the clones of products that were hugely popular in Russia in the late 1980s and early 1990s, with Sega and Dendy the two best-selling brands.

For its part, the Dendy is a clone of the Nintendo NES, which was never officially launched on the Russian market. The brand was originally owned by the Steepler Group, which went into liquidation in 1996, but has now been revived under new ownership. This has seen Dendy-branded products widely available at about $45, with Russians typically buying them for their nostalgia value or as entry-level consoles for their children.

Such games and consoles look sure to retain their popularity as long as Russia's Generation Y consumers continue to be nostalgia-minded and do not hanker after the latest mainstream gaming releases. With all these diverse factors taken into consideration, it is clear this segment represents a new opportunity for Hong Kong suppliers and distributors with an interest in the Russian market and familiarity with its e-commerce and conventional retailer channels.

It is also worth bearing in mind that the majority of the related Soviet-era brands date back to the 1960s or 1970s and have either never enjoyed patent protection or have seen any such restrictions lapse long ago. Within Russia, though, these brands are fondly remembered, with names such as VEF and RRR (electronics), Melodia (audio equipment) and Zenit (photography equipment) still commanding a high level of nostalgic regard. Indeed, any Hong Kong business enterprising enough to revive one of these former market mainstays would be well-placed to capitalise on the nostalgic sentiment driving purchase decisions among the many retro-minded Russians.

 
 
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