Slow take-off could mean better penetration: ScreenDigest on DVD players vs gaming consoles

Although the DVD player is generally considered to be the fastest growing consumer electronics device, analysis of Screen Digest's global hardware figures reveals that in the initial take-up period gaming hardware has actually achieved a faster rate of adoption. Games consoles such as the PlayStation 2 (PS2) and Game Boy Advance (GBA) have an immediate but short-term impact on the hardware market, whilst the impact of DVD players is slower but more enduring. Released in 2000, the PS2 attained a global installed base of almost 60m within four years of launch. A year later, the GBA (and its derivative GBA SP) was expected to exceed this figure by end 2004. Conversely DVD (launched in 1997) failed to achieve half the installed base of these gaming platforms after four years on the market, with only 25.5 mln equipped households by 2000. An evaluation of the installed base for the three respective hardware platforms in Europe, USA and Japan endorses the trend identified in the global market. However, after a further two years the market position of gaming hardware and DVD is reversed as the video format's installed base overtakes that of the gaming platforms. Six years after release, the global installed base of DVD reached over 100 mln households, compared with 86m PS2s and 78m GBAs (according to Screen Digest forecasts). This illustrates the cyclical nature of gaming hardware, with sales declining as the hardware approaches the end of its lifespan and is superseded by the next generation. This trend is also reflected in the European and American markets. However the situation in Japan is different, as DVD hardware has taken much longer to penetrate the mass market. Six years after release the installed base of the GBA at 19 mln and PS2 at 18 mln still eclipses that of the 6 mln achieved by DVD. By 2004, eight years after the launch of DVD in 1997, there is little doubt that the global installed base of DVD hardware will continue to grow, whereas the number of gaming households eight years after launch is expected to remain flat as the platforms are superseded by newer models. In fact, in Western markets the number of DVD households is expected to be two or three times that achieved by either gaming platform after eight years. This highlights the fact that in the West DVD has become much more of a mass-market consumer electronics device when compared with the limited demographic appeal of gaming devices. The presence of a highly developed video game culture and the relatively slow adoption of DVD players (at least until the introduction of DVD recorders with built-in hard disk drives) means that Japan somewhat contradicts the pattern, with an installed base of DVD player/recorders in 2004 slightly lower than that of either of the two gaming platforms eight years after launch.