CSMG (Cambridge Strategy Management Group), the strategy division of TMNG Global, which provides management consulting services to the communications, media and entertainment industries, has published its report on the global video games market and its impact on mobile and fixed service providers, entitled: Playing Games: A Revolution In Interactive Entertainment. Fuelled by increased network access, faster broadband speeds, next-generation consoles and more capable mobile devices, the dramatic growth in the videogames market presents tremendous opportunities for service providers to capture greater share of this market, according to CSMG.
Despite the current economic downturn, gaming has proven to be resilient in these trying times, and is the leading entertainment segment that is fueling growth, says TMNG Global Chairman and CEO, Rich Nespola. The expansion of casual games, simpler user interfaces and the proliferation of innovative business models is broadening the gamer demographic. The timing is ripe for service providers to hedge the business cycle by capturing the robust opportunities to grow the mobile gaming market.
The report finds that the global gaming industry is expected to reach $40 billion (29 billion) in annual revenues by 2012. By comparison, US gaming software sales reached $20 billion in 2008 from $9.4 billion in 2005. Mobile games represents the fastest growing segment, with a 24.6% CAGR (compound annual growth rate) forecast for 2007 through 2012. The average age of a gamer has increased to 33 years, and female gamers now reach almost 50% across many types of games.
According to CSMG, service providers are well positioned to become a compelling digital distribution channel for video games, given their existing assets. Carriers already have a scalable network infrastructure, established subscriber base, sophisticated billing systems and bundled product portfolios. Furthermore, service providers can leverage their network to offer value added services such as VoIP and IP chat, to enhance the consumer experience and drive adoption.
The report finds that the standardization of mobile software platforms presents the biggest opportunity for service providers in capturing a greater share of mobile gaming. Operators have the opportunity to create a standards-based mobile gaming marketplace, says CSMG. This approach will encourage and incent the mobile gaming developer base, with the potential to accelerate market growth by increasing gamer penetration, gaming ARPU, on-deck/off-deck purchases, and operator and developer revenue share.
The report is based on executive interviews with major service providers, gaming industry players and additional value chain participants, as well as qualitative and quantitative strategic analysis of emerging trends and their impact on the gaming market. The study aims to identify specific opportunities for service providers, both mobile and fixed, to benefit from the growth in gaming, by evaluating market trends and identifying specific opportunities that generate tangible results in the short to medium term.
You can see the full report here. 
