Hello Researchondemand-ga,
Thank you for your question.
You will find everything you mentioned in your question in the IGDA
Online Games White Paper 2003 (140 pages).
The purpose of the Online Games White Paper is to provide online games
market statistics, business model descriptions, technology summaries
and publisher listings. Additionally, this White Paper provides online
games case studies and reference resources.
This White Paper includes information about online games played
through the Internet via PCs and video game consoles (eg, PlayStation
2, Xbox, GameCube). This White Paper also mentions online games played
through wireless devices (eg, mobile phones, PDAs) or interactive
television set-top boxes.
Below you will find relevant excerpts, however I highly recommend that
you read this publication in its entirety.
“Most industry analysts agree that online games will continue to grow
in raw usage, and will generate significant revenue, with predictions
varying from $1.8 billion in revenue in 2005 according to IDC to $2.55
billion in revenue in 2006 according to Jupiter.”
(..)
The six types of online games discussed include: PC Massively
Multiplayer games (MMPs, also frequently called Massively Multiplayer
Online Role-Playing Games (MMORPGs), Persistent-State Worlds
(PSWs), or Massively Multiplayer Online Games (MMOGs)); PC CD-Based
Online Games; PC Web- Based Games; Console-Based games; Wireless
platform games; and Interactive Television games.
=========================================================
Online Game Genre Current US Market Size
=========================================================
MMPs Small; 1,000,000- 1,500,000 players
PC CD-based Small; varies by title, but aggregate less than
5,000,000
PC Web-based Large; 50,000,000 or greater
Console Small, approx. 800,000 online console players
Wireless Small - growing quickly;10x growth in next 5 years
Interactive Small; few enabled advanced set-top boxes
Television commercially deployed
The complete table contains Common Revenue Sources , Average Revenue
Per Player and Potential Near-to-Medium Term Revenues (Page10)
=========================================================
(..)
Sony, Nintendo and Microsoft all introduced online adaptors for their
consoles in 2002.
“Sony’s PlayStation 2, which holds a commanding lead in market share
for consoles with a US installed base of 16 million in early 20033,
currently supports both broadband and narrowband connections through
their online adaptor. The only equipment required to play online is
the adaptor and a game that supports online play.”
(..)
“Microsoft’s Xbox Live service provides a substantially different
model. Customers purchase the Xbox Live Communicator, priced at
$49.95, which includes a voice headset and a year of online play.
Microsoft has not announced any payment plans or policies after the
first year expires. Customers then create a single account and enter
the Xbox Live service through a single interface, regardless of
publisher. Additionally, Xbox Live requires a broadband connection.
. . . Microsoft has said publicly that it is very pleased with the
performance of Xbox Live, although the console remains in a tight race
with the Nintendo GameCube for the #2 market position in the United
States.”
(..)
“Nintendo has been very quiet about their online plans. Their major
online product so far has been the port of Phantasy Star Online, the
first online console game by Sega, to the GameCube. Nintendo’s plans
may be complicated by their traditionally younger demographic. The
Children’s Online Privacy and Protection Act (COPPA) requires specific
protections for children under 13 in their online activities. . . .
Additionally, Nintendo may view their handheld market as more
important for multiplayer use than the GameCube.”
Online Wireless Games:
“Online services in the US have traditionally lagged behind offerings
in Japan and Europe, and games are no exception. While the slow
adoption of 2.5G and 3G infrastructure and services has further
impeded online wireless game services in the US, more companies are
beginning to roll out advanced networks and hardware, priming the
market for rapid growth over the next 5 years. IDC estimates an
increase in mobile game players from 7 million in 2002 to over 70
million in 2007.”
Consumer Segments:
- Mass-market online game player.
- Hard core
“The mass-market online game players are the largest segment of online
game players. This segment is defined as users who primarily play free
online games such as word, puzzle, card, board, casino (not gambling)
and game show games (Price is Right, Jeopardy, etc.). IDC estimated
that there were 30.8 million casual PC online game players in 2002,
with the number expected to grow to 55.4 million in 2004.”
“The hard-core online gaming audience is much smaller and includes
users who primarily play online role-playing, strategy, shooter,
action type of games. IDC estimated an audience of 8.4 million online
hardcore PC gamers in 2004. “
Market Size Projections:
“The value of the online games market is obviously dependent on both
the gross size of the market as well as the average revenue per user.
In many ways, the games market is mature. Growth is projected to
slow over the next four years, with even the introduction of new
console platforms in 2005 failing to significantly increase the total
number of gamers.”
Graphs:
Audience growth by Platform 2002-2007 (page 24)
Games Revenues by Platform 2002-2007 (page 25)
Broadband Penetration:
“Perhaps the most important issue in online games over the next two
years is the increasing rate of broadband penetration. Broadband
penetration for US households increased from 10 million in 2001 to
16 million in 2002, out of approximately 60 million total online
households7. As broadband penetration increases, the potential market
for advanced online services also grows, making broadband connectivity
requirements and the enhanced gameplay they support a viable
position.”
Market:
Online gaming is expected to represent the future of the computer game
industry. According to market research firm IDC, the value of the
industry is expected to reach $1.8 Billion by 2005, up from $210
million in 2001. Similarly, market research firm Jupiter projects that
the online gaming market will be worth $2.55 Billion in 2006; the bulk
of the revenue coming from subscriptions. The highest projection comes
from consulting firm Forrester Research, which projects that online
game revenues will more than double each year from now to 2005, when
the market will reach total sales of $4.3 billion. The console gaming
market, which generated $9.4 billion in hardware and software sales in
the United States in 2001, is seen by many analysts as being at the
start of a five-year growth cycle, led by the simultaneous market
presence of four advanced consoles: Sony’s PS2, Microsoft’s Xbox, and
Nintendo’s GameCube and Game Boy Advance.”
Age:
“The average age of online gamers continues to increase. Part of this
is due to the overall increase in the proportion of Baby Boomers in
the general population. Another factor is that there are more
computers in the hands of the older generation. As this group becomes
more comfortable with computers they begin to discover games as an
entertainment resource. Since they are less likely to own game
consoles, online games have become an entry path to the world
of games.”
Sony’s PlayStation 2 - Product Overview
“In August 2002, Sony started selling its network adaptor that enabled
PS2 users to play onlineenabled PS2 video games on the Internet with
either a broadband or dial-up connection. The network adaptor costs
approximately $40 and also includes a mail-in offer for a free copy of
Twisted Metal: Black Online, a Start-Up Disc with playable demos of
Frequency and Madden NFL 2003 and video demos of ATV Offroad Fury 2,
Tony Hawk’s Pro Skater 4, Tribes Aerial Assault and a bonus video. PS2
owners are responsible for paying for their own Internet connectivity
but Sony will not charge any additional fees for playing PS2
online-enabled games. Game publishers and ISPs though do have the
option to charge for PS2 connectivity or any matchmaking features or
functionality. As of September 2002, there are six PS2 online-enabled
games in the marketplace. At a future date, Sony plans on selling a
PS2 hard drive peripheral at an additional cost to the consumer.”
Nintendo’s GameCube - Product Overview
“Nintendo is selling separately a dial-up and broadband adaptor in
Fall of 2002 for approximately $35 each. The first games that will be
GameCube online-enabled will be Phantasy Star I and II from Sega.
GameCube owners are responsible for paying for their own Internet
connectivity but Nintendo will not charge any additional fees for
playing GameCube online-enabled games. Identical to Sony, game
publishers and ISPs do have the option to charge for GameCube
connectivity or any matchmaking features or functionality.”
Microsoft’s Xbox - Product Overview
“Microsoft launched its Xbox Live service officially on November 15,
2002. The service is available for broadband customers only. The
starter kit costs approximately $50 and includes a headset for voice
input and a one-year subscription service to Xbox Live. Xbox is ready
to connect to broadband right out of the box, although Xbox owners are
responsible for paying for their own broadband Internet connectivity.
As a side note, Xbox already includes an 8 GB hard drive built into
the console.”
Wireless Market:
“The growth of wireless gaming is the next step in the evolution of
the video game industry. . . . Now the US market is heating up, and
both carriers and developers are determining how they may profit by
the explosion of SMS and MMS technology in the North American
marketplace. While games have been provided as a value-added service
so far, there is a move towards gearing up both subscription and
pay-for-play skillbased wireless apps. Mobile content will see a
sizable boost from wireless gaming, as the number of wireless gamers
is
expected to grow tenfold from 2002 to 2007, according to a November
19, 2002 report by IDC in Emarketer. The research firm’s study, “Are
We Having Fun Yet?: US Wireless Gaming Forecast, 2002- 2007” predicts
that from 7 million in 2002, there will be over 70 million US wireless
gamers in five years.”
You must be registered with the IGDA (free user account) to download
the White Paper. https://www.igda.org/join/join_member.php?join=user
IGDA Online Games White Paper (140 pages)
2nd Edition – March 2003
http://www.igda.org/online/online_whitepaper.php
====================================
From Alcatel:
Age Groups:
“In the United States, 72 percent of people aged 15 - 19 play online
games and 32 percent of people aged 45 - 54 play online games. In
Europe, 50 percent of people aged 15 - 24 play online games and 31
percent of people aged 25 - 34 play online games. These demographics
point to a broad and lucrative market; in Western Europe alone,
revenue from online gaming is expected to reach U.S. $4.9 billion by
2005.”
Revenue Forecast:
“According to Schema's research, subscribers to online gaming services
are expected to spend U.S. $40-$100 per year on networked games once
the service is fully launched. Approximately 25 percent of the profits
will go to access network operators.”
http://www.alcatel.com/carriermarketdevelopment/service_sheets/Online_Gaming_sb/index.jhtml
====================================
From Game market Watch:
“Global shipments of game consoles will reach 41.9 million units this
year, up 84% from the 2001 level. According to the report, the Sony
PlayStation 2 will account for 63% of these sales, Nintendo’s GameCube
for 21%, and Microsoft’s Xbox 16%.
Factoring in cumulative shipment figures to predict that by the end of
the year, the Playstation 2 will hold a 72% market share (50 million
units). Nintendo’s GameCube is expected to be a distant second with
16% (10.8 million), and Microsoft’s Xbox will bring up the rear at 12%
(8.2 million).”
Source: Game Market Watch
http://www.gamemarketwatch.com/news/item.asp?nid=2581
====================================
Games Console Market Shares:
At the end of August, according to the Los Angeles Times US market
share figures for game consoles stood at
Sony PS2 10.8 million 69%
Microsoft Xbox 2.7 million 17%
Nintendo Game Cube 2.2 million 14%
Source: Online Reporter
http://www.onlinereporter.com/torbackissues/TOR320.htm#Games%20Console%20Market%20Shares
====================================
From CNN Money:
“By 2007, Microsoft hopes to have 10 million subscribers for Xbox
Live. It's an ambitious goal, but if met, it could mean a cash inflow
in the neighborhood of $1.2 billion per year for the company. Like any
ambitious goal, though, it has a lot of obstacles in its path. And the
company's fate isn't entirely in its own hands.
Console gamers tend to skew younger than PC gamers – 46 percent are
under 18 years of age, as opposed to just 34 percent for the PC. While
those players can easily afford the $49.99 starter kit (which covers
the first 12 months of service) and the likely $10-$15 monthly fee
that will follow, it's unlikely they have the disposable income to
cover broadband costs as well. And convincing mom and dad to pay
$50-$60 per month so they can play games online won't be easy.”
http://money.cnn.com/2002/10/08/commentary/game_over/column_gaming/
====================================
DFC Intelligence Game Industry Forecasts for the Online Games Market
-----------------------------------------
Worldwide PC Online Gamers by Region 2006
-----------------------------------------
North America Gamers 55%
Asia/ROW Gamers 23%
Europe Gamers 22%
-----------------------------------------
-----------------------------------------
Worldwide PC vs Console Online Gamers 2006
-----------------------------------------
Total PC Gamers 79%
Total Console Gamers 21%
-----------------------------------------
------------------------------------------------------
Console Online Game Hours of Use by Consumer Type 2006
------------------------------------------------------
Casual console 1%
Moderate console 63%
Hard-core Console 36%
------------------------------------------------------
------------------------------------------------------
PC Online Game Hours of Use by Consumer Type 2006
------------------------------------------------------
Casual PC 46%
Moderate PC 37%
Hard-core PC 17%
------------------------------------------------------
Source:
DFC Intelligence Website
http://www.dfcint.com/game_article/forecasts.html
====================================
Report: Online Gaming Reaching Critical Point
“According to Datamonitor, even if console online gaming will not take
off overnight, consumers are bound to move towards consoles. The
market for online games will reach US$2.9bn in 2005, up from US$670m
this year.
From representing the second largest market for online games behind
South Korea, the United States (US) will climb to the first spot by
2005. They will generate more revenues than the entire Asia Pacific
region. Europe will continue to lag behind the US and Asia Pacific,
due to its fragmented market, the slower rollout of console online
gaming and the overall lower penetration of broadband in households.”
http://www.gamemarketwatch.com/news/item.asp?nid=2562
====================================
The Themis Group estimates overall online gaming revenues for 2003 at
$635 million USD.
“It’s clear that the online gaming portion of the industry is going
to experience surging growth over the next two to five years,
especially in the area of subscription-based games. In calendar 2003
alone, we see a likelihood of over $400 million USD in total
subscription revenues for persistent worlds, such as Lineage: The
Bloodpledge, Dark Age of Camelot, Star Wars Galaxies and The Sims!
Online.”
“wireless gaming is set to explode over the next four years. “While
revenues are small today,” Themis Report co-author and noted game
designer Greg Costikyan pointed out, “they could easily reach $660
million in the US and $1.5 billion worldwide.”
Source: PC Gameworld
http://www.pcgameworld.com/story.php/id/234/
Wireless Gaming: Finally No Fantasy
January 2003
As handset hardware and networks improve, carriers see cell-phone fun
as the Next Big Thing for firing up subscribers' spending
“Carriers are adding dozens of new games each month, and handset
makers are rolling out new toys for the wireless crowd: On Feb. 5, No.
1 cell-phone maker Nokia will introduce the first wireless gaming
console, called N-Gage, which is also a cell phone and will appear in
stores later this year.”
“Cell phones, however, are where the action -- and profits, likely --
will be first. This year, No. 2 mobile-phone maker Motorola will debut
several models that allow users to press multiple keys simultaneously
-- a must-have for action play. Today, that's available on only one
Motorola phone -- the A830, which retails in Europe for $1,172 and up.
Manufacturers such as Samsung are designing their phones to play music
or vibrate whenever a player makes a good or bad shot in a game.”
(..)
“The number of wireless gamers in the U.S. should reach 19.6 million
by yearend -- and 112.4 million by 2007, according to tech consultancy
IDC. Gaming revenues should grow dramatically as well, it predicts.
Total hardware, software, and services sales will probably hit $4
billion, from $366 million, over the same period, estimates IDC
analyst Shelley Olhava. That would be impressive, considering that the
market for home gaming consoles reached only $9.4 billion in 2002 --
after years of intensive marketing. And gaming consoles sell for $200,
vs. just $3 to $7 per wireless game.”
Source: Business Week
http://www.businessweek.com/technology/content/jan2003/tc20030122_7509.htm
====================================
Additional information that may interest you:
Online Gaming habits:
This article describes the results from a survey on online gaming
habits.
http://www.game-research.com/art_online_gaming.asp
Inside the Serious Business of Online Gaming by Lou Hirsh
October 4, 2002
E-Commerce Times
http://www.ecommercetimes.com/perl/story/19585.html
Search Criteria:
Digital Gaming Industry
Online console gaming
Forecast market for online video game consoles.
U.S. online video games
Online gaming forecasts
I hope this response has provided you with the information you were
seeking.
Best Regards,
Bobbie7-ga |
