IDC CEMA Telecommunications Newsletter September 2007
 
IDC CEMA (Central & Eastern Europe and Middle East & Africa)
http://www.idc-cema.com/		  
 
IDC Predicts Worldwide Online Console Revenue Will Reach $10.5 Billion by 2011

FRAMINGHAM, Mass., August 8, 2007 – In the current videogame console cycle, each of the three consoles – Microsoft's Xbox 360, Sony's PLAYSTATION 3 (PS3), and Nintendo's Wii – is capable of connecting to the Internet out of the box, and each has onboard storage for downloaded content. In addition to primary traditional hardware and software sales, connected consoles now support three additional business models: premium subscription fees, paid downloadable content (DLC), and a fledgling advertising market. The revenue derived from online consoles is separate from online PC game revenue and from the traditional retail-driven videogame hardware and software revenue.

"Gamers' use of connected consoles is expanding the business opportunities and cash flow this console cycle," says Billy Pidgeon, program manager, Consumer Markets: Games. "This emerging sector has huge potential. Getting gamers online and enticing them to spend on content and services is crucial for vendors and publishers."

Revenue streams enabled by active online consoles in this cycle show the strongest growth in the sector and will not only determine the future success of the console vendors but also be crucial to the success of many third-party publishers.

Other key findings from IDC's study of the connected console market include:

  • Revenue derived strictly from connected consoles will grow from $981 million in 2007 to $10.5 billion in 2011. In 2007, online console revenue will be 2.5% of total global videogame market revenue, including console and handheld hardware and software revenue. By 2011, revenue from connected consoles will represent 18.6% of total market revenue.
  • Although subscription revenue for premium online services and games will grow from $476 million in 2007 to over $2.4 billion in 2011, its share of online console revenue will decline from 48.5% in 2007 (already down from a high of 86.5% in 2006) to 23.2% by 2011.
  • Downloadable content (DLC) consisting of games and game-related items, which at $35 million in 2006 represented a 13.5% market share of online console revenue, will become connected consoles' primary revenue source in 2007, growing from $493 million in 2007 to $7.2 billion in 2011. In 2011, game-centric DLC will make up 68.6% of online revenue.
  • Advertising revenue from sponsored services, in-game ads, and product placement in connected consoles will reach $12 million in 2007, posting the first significant online console ad spend. Advertising revenue will grow to $858 million in 2011, with an 8.2% market share of online revenue.
This IDC study, Worldwide Connected Console 2007-2011 Forecast: Downloads for Dollars (IDC #207779) provides an analysis of the worldwide videogame connected console sector. In addition to a high-level overview of market trends and competitive differences, it also provides a forecast by U.S. and worldwide regions of online capable and active online console installed base and revenue.

For more information about purchasing this study, please contact:
Tatiana Hinova
+420 221 423 140
thinova@idc.com

Recommend This Newsletter to a Friend or Colleague

Please unsubscribe me

If you haven't already, register at our Web site to know what's happening and to help us improve our products and services. You can register at http://www.idc-cema.com/about/index.php?action=regform

IDC CEMA
Malé náměstí 13
110 00 Praha 1
Czech Republic
Tel. +420 2 2142 3140
Fax. +420 2 2142 3150
www.idc-cema.com
www.idc.com