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Electronics Production | August 18, 2011

Demise of game consoles is greatly exaggerated

The latest International Data Corporation (IDC) forecast of the worldwide video game and interactive entertainment console market points to a rebound beginning in 2012, largely driven by new platform releases and rising console penetration and spending in select developing economies.
"Total console hardware and disc-based software revenues are on track to slide a few percent in 2011 compared to 2010," says Lewis Ward, research manager, Consumer Markets: Gaming, at IDC. "But prognostications that consoles have peaked as a product category are premature. I expect that the launch of the Wii U, a revamped interactive entertainment console from Microsoft in the 2014 timeframe, and the arrival of Sony's 'PS4' circa 2015 – along with more than a few exclusive, innovative games – will help drive a new wave of console-centric spending in the next several years."

IDC forecasts direct global console hardware and disc software sale revenue will increase at a compound annual growth rate (CAGR) of 3.6% from 2010 to 2015, reaching USD 39.7 billion in 2015 with developing economy growth rates about twice those in developed markets. Despite this rebound, the installed base of actively used game consoles won't keep pace with the number of worldwide households.

IDC expects there to be about 257 million active consoles worldwide by 2015, or 12.7% of anticipated households that year, down about 1% when compared to same console penetration figure for 2011. In this sense, it's possible to conclude that console popularity will slip due to the rise of media tablet gaming, casual, free-to-play/social online PC games, etc.

The forecast also shows the PS3 will have the largest active installed base of any game console worldwide by 2015. In this sense, the PS2's 'long tail' may ultimately repeat.

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