Games set to mushroom into mainstream

Summary:Game geeks, move over. The worldwide electronic gaming market will leap 71 percent to nearly $86 billion by 2006, as new systems-think Xbox and TV-based consoles-pull in more mainstream players.

Driven primarily by the release of new gaming systems, the worldwide electronic games sector is poised to jump 71 percent to nearly $86 billion over the next five years, according to a new study.

A growing number of people will use the Internet to play games as a wider choice of systems--including improved game consoles, TVs and PCs--becomes available, according to a report released Friday by London-based publisher Informa Media Group.

"The big difference over the next few years will be a move away from the image of gamers as 'nerds,'" said Adam Thomas, co-author of the report.

"Games will move very much into the mainstream--something that will see 'ordinary' people playing games much more, using their mobile phones and TV sets. This will mean the games market is addressing a much bigger segment of the population and revenues will go up quickly because of it," he added.

The study found that game revenues from the Internet, interactive TV and mobile phones, which accounted for less than 2 percent of the industry total in 2000, will rise 27 percent by 2006.

The entire gaming sector has recently been buzzing about new and improved game consoles equipped with more Internet features. During last week's Electronic Entertainment Expo (E3), many of the biggest names in the gaming industry went head to head, kicking marketing efforts into full gear and trumpeting the latest product releases and Internet deals.

Microsoft, for one, touted its entrant in the growing market, announcing the sale date of its long-anticipated Xbox console, which will hit store shelves on Nov. 8 for $299. Around the same time, Nintendo will begin selling GameCube, its latest game console. Meanwhile, Sony highlighted significant content partnerships for its PlayStation 2 gaming system, including alliances with America Online, Cisco Systems and Macromedia.

During the next five years, sales of game consoles, which will remain the dominant system, will rise 73 percent from $18.8 billion to $32.6 billion. In 2000, interactive TV and mobile phone games generated $842 million in sales and in 2006 will account for $22.8 billion. Online games sales are expected to hit $5.6 billion. In the interim, the struggling video-arcades market will continue to see sluggish sales, falling from $13.9 billion in 2001 to $10.7 billion in the next five years.

The U.S. electronic games market this year is expected to see sales of around $15.7 billion, with revenues expected to rise to $23.7 billion by 2006. Sales in other markets that have lagged, such as Asia-Pacific and parts of Europe, will see increased revenues, gaining some share of the overall sector.

Informa will release the complete report, titled "Games," in June.

Topics: Tech Industry

About

Ian Ferguson is a partner at Olswang, specializing in commercial transactions including in relation to sourcing, technology, and telecommunications. Ian advises customers and suppliers on sourcing transactions across sectors including business processes, IT services, communication services and facilities management, multi-jurisdiction... Full Bio

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