Video Games Industry Set for Growth
The video games industry across the US and Western Europe will witness steady growth through to 2015, reaching $15.7bn (£10.1bn) and €10.2bn (£8bn) respectively in total retail value, according to the latest Console, Handheld and PC Gaming Report from Futuresource Consulting.
Across both regions, the packaged games market will start to witness a slow decline in value throughout the forecast period, but this decline will be offset by the growth in online and mobile gaming, with online being most significant.
The rise in online gaming is spreading the popularity of gaming as an activity across a wider demographic, driven by the adoption of free, app-based games, casual online games and gaming subscription services. This is impacting negatively on consumer spend in the traditional packaged games sector, with a 15 per cent and 12 per cent decline expected in 2012 in the US and Western Europe respectively, as current consoles mature, and smartphone, Tablet and online gaming continue to gain in prominence. However, says Futuresource, gaming hardware and content manufacturers can generate revenue streams and reduce customer churn by delivering enhanced subscriptions and downloadable content to subscribers.
The retail value of online games in the US is expected to hit $6bn in 2015 in the USA, up from $3bn. The figure for Western Europe is also forecast to double, from €1.5bn in 2011, to €3bn in 2015.
Growth in mobile gaming has been triggered by the widespread adoption of Tablets and smartphones, driving momentum in app-based games, assisted by strong franchises supporting multiple operating systems, low prices and availability of free titles. However, this is negatively impacting the handheld gaming market and distracting casual gamers away from consoles.
Browser- and social network-based games are driving growth in PC online gaming and although they are often free, they can also support micropayments. Advanced PC-based services including Steam are also becoming popular, with multiplatform capabilities seen as a major growth area.
The anticipated launch of new consoles, including Sony Playstation 4, Microsoft Xbox 720 and Nintendo Wii U in late 2012 and late 2013 are expected to support packaged media and will provide a much-needed boost for console manufacturers and publishers alike, with the industry hoping to attract lapsed users and provide a brief reprise for packaged games. However, says Futuresource, a slow decline will follow, as few users will replace existing devices, since their gaming needs are increasingly being satisfied with non-dedicated gaming products, and digital delivery begins to fulfil the role of catalogue sales.