Executive Summary


The global video gaming market is expected to grow at a CAGR of 8.9% over the period 2008-2013 to reach $76.1bn in 2013. In the future the market will be driven primarily by online and mobile gaming formats, which in turn are being driven by increasing internet, broadband and mobile penetrations. Video games publishers are changing their business models and adopting alternative distribution channels to enhance their profits and curb the malpractice of piracy. The industry value chain is evolving in the wake of new business and distribution models.

This report provides an overview of the global video gaming market, covering aspects such as market size and growth, factors driving this growth and trends in the market. It covers the key developed and emerging markets in terms of penetration of internet, broadband and mobile technologies and the uptake of different video gaming platforms. It analyses the changing demographic profile of gamers, evolving business models and evolutions in the value chain of the video gaming industry, with a focus on the emerging trends. It also discusses the key challenges that the market is currently faced with and provides an insight into the key players involved in the market.Through analysis and forecasts, this report provides insight into the direction of the video gaming market, which is undergoing major structural transformation.

Key findings

The global video gaming market is expected to grow at a CAGR of 8.9% over the period 2008-2013.

Online gaming and mobile gaming are likely to be the key drivers of the growth in the global video gaming market. While console gaming will continue to be the largest segment, its market share is expected to decline.

Key video gaming markets include the US, Canada, Western Europe, China, Japan and South Korea, while India, Brazil, Russia and South East Asia comprise the key emerging markets for video games.

Piracy and IP protection are the key challenges for the video gaming industry at present and in the future.

The demographic profile of video gamers is changing and there is a strong growth in the number of casual gamers, which primarily consist of women and older men.


Use this report to
.

• Analyze market trends to predict key growth areas in the video gaming market.
• Examine the challenges and threats facing the global video gaming market and their impact on the industry.
• Quantify the global and regional video gaming markets, including product shipment data and forecasts of mobile and broadband uptake that will drive future growth.
• Gain insight into the key different types of video gaming models, and identify trends and keys to growth in each.
• Compare how different players in the space are positioning and developing their offerings in order to differentiate themselves from the competition.

Discover

• What are the current trends in the global video games industry?
• Which industry segments offer the greatest growth opportunities in the market?
• Which regions are more developed markets and which are the emerging areas presenting potential growth opportunities?
• Who are the key players in the industry?
• What is the industry structure and how is it changing?
• How is the demographic profile of gamers changing and what is its impact on the industry?
• What are the key challenges facing the industry and how are they being dealt with?
• How is the industry expected to evolve and what is the future outlook?

Table Of Contents

Table of Contents
The Video Gaming Market Outlook
Executive summary 12
Market development 12
Console gaming - slowing growth 13
Online gaming - driving the growth of video gaming 14
Mobile gaming - rising rapidly 15
PC gaming - declining market 16
Changing demographic profile - the rise of casual gaming 17
Evolving business models - rise of in-game advertising,
microtransactions and digital distribution 18
Changing value chain - impact of industry consolidation and changing
distribution models 19
Key and emerging video gaming markets 20
Chapter 1 Introduction 24
What is this report about? 24
Methodology and definitions 25
Chapter 2 Market development 28
Summary 28
Overview 29
Introduction 29
Market size and growth 29
Key global video games publishers 32
Emerging sectors in video gaming 33
Multimedia consoles 33
Thought controlled games 33
User-generated content 33
Social gaming 34
Advergaming 35
Serious gaming 35
Challenges for the video games industry 37
Piracy 37
Piracy - some statistics compiled by Interactive Software Federation
of Europe (ISFE) 37
Intellectual Property Rights 38
Chapter 3 Console gaming - slowing growth 40
Summary 40
Console software market 41
Market size and growth 41
Console software publishers 41
Console hardware market 43
Market size and growth 43
Console hardware manufacturers 45
Online console market 48
OnLive - a potential threat to console gaming 50
Chapter 4 Online gaming - driving the growth of video gaming 52
Summary 52
Market size and growth 53
Drivers of online gaming 54
MMOGs (Massively multiplayer online games) - Dominating the online
games market 55
Drivers of MMOGs 56
Gaming as a social medium 56
Increasing broadband users 56
MMOG competitive landscape 57
Chapter 5 Mobile gaming - rising rapidly 60
Market Size and growth 60
Drivers of mobile gaming 61
Increasing mobile and 3G penetration 61
Increasing smartphone sales 63
Apple iPhone - revolutionizing the mobile gaming market 64
Key mobile gaming publishers 65
Chapter 6 PC Gaming - declining market 68
Summary 68
Market size and growth 68
Reasons for the decline of PC gaming 69
Lack of new game titles and sophisticated games 69
Cannibalization by console games 70
Advent of online and wireless gaming 70
Chapter 7 Changing demographic profile - the rise of casual gaming 72
Summary 72
Overview 73
Increasing casual gaming market 73
Profile of casual gamers 74
Increasing average game player age 75
Increasing participation from women 77
Video games in the family and as social medium 77
Chapter 8 Evolving business models - the rise of in-game advertising, microtransactions and digital distribution 82
Summary 82
Overview 83
In-game advertising 83
Online/ digital distribution 85
Microtransactions 86
Chapter 9 Changing value chain - impact of industry consolidation and changing distribution models 90
Summary 90
Overview 90
The traditional video gaming value chain 91
Key components of traditional value chain 92
Developer 92
Publisher 92
Distributor 92
Retailer 92
The new video gaming value chain 93
Consolidation of developers and publishers 93
Digital distribution 94
Rise of mobile and online gaming 95
Chapter 10 Key and emerging video gaming markets 98
Summary 98
The key video gaming markets 99
The US 99
Market size and growth 99
Internet and broadband penetration 100
Mobile penetration 101
Key video games publishers 102
Canada 103
Market size and growth 103
Internet and broadband penetration 104
Mobile penetration 105
Key video games publishers 106
China 106
Market size and growth 106
Internet and broadband penetration 109
Mobile penetration 109
Key video games publishers 110
South Korea 111
Market size and growth 111
Internet and broadband penetration 112
Mobile penetration 113
Key video games publishers 114
Japan 115
Market size and growth 115
Internet and broadband penetration 116
Mobile penetration 117
Key video games publishers 117
Western Europe 118
Market size and growth 118
Key video games publishers 119
Key video gaming markets in Western Europe 120
Emerging video gaming markets 126
India 126
Market size and growth 126
Internet and broadband penetration 127
Mobile penetration 128
Key video games publishers 129
Brazil 129
Market size and growth 129
Internet and broadband penetration 130
Mobile penetration 131
Key video games publishers 132
Russia 132
Market size and growth 132
Internet and broadband penetration 133
Mobile penetration 133
Key video games publishers 134
South East Asia 134
Market size and growth 134
Internet, broadband and mobile penetration 135
Index 137
List of Figures
Figure 2.1: Global video gaming market size ($bn), 2003-2013 29
Figure 2.2: Global video gaming market by format (%), 2008-2013 30
Figure 2.3: Global video gaming market size by geographic region (%), 2008-2013 31
Figure 2.4: Examples of advergaming 35
Figure 2.5: EVE Online screenshot 36
Figure 3.6: Global console gaming market size ($bn), 2003-2013 41
Figure 3.7: Global console shipments (m), 2006-2013 44
Figure 3.8: Global console shipments (m), H1 2008 - H1 2009 45
Figure 3.9: Positioning of key consoles 46
Figure 3.10: Comparison between key video game consoles 47
Figure 3.11: Global online console market size ($bn), 2008-2013 48
Figure 3.12: Global online console market size break-up ($bn), 2008-2013 49
Figure 4.13: Global online gaming market size ($bn), 2008-2013 53
Figure 4.14: Worldwide internet users and penetration, 2004-2008 54
Figure 4.15: Worldwide MMOG subscribers (m), 2004-2008 55
Figure 4.16: Global MMOG market size ($bn), 2008-2013 56
Figure 4.17: Worldwide broadband users and penetration, 2004-2013 57
Figure 4.18: MMOG key players' market share (%), June 2008 58
Figure 5.19: Global mobile gaming market size ($bn), 2003-2013 61
Figure 5.20: Worldwide mobile subscribers and penetration, 2004-2008 62
Figure 5.21: 3G share of mobile phone subscriptions and revenues (%), 2004-2013 63
Figure 6.22: Global PC gaming market size ($bn), 2003-2013 69
Figure 7.23: Global casual gamers’ profile, (2007) 74
Figure 7.24: US comparison of gamers’ age, (2006, 2008) 75
Figure 7.25: UK breakdown of gamers and non-gamers by age (%), (2008) 76
Figure 7.26: US comparison of gamers’ gender, (2006, 2008) 77
Figure 7.27: US break-down of gaming software genres shipments (%), (2005, 2009) 78
Figure 7.28: European parents playing video games with children (%), (2008) 79
Figure 8.29: Global in-game advertising market size ($bn), 2008-2013 84
Figure 8.30: Examples of in-game advertisements 85
Figure 9.31: Traditional video gaming value chain 91
Figure 9.32: Evolution in video gaming value chain 93
Figure 10.33: The US video gaming market size ($bn), 2003-2013 100
Figure 10.34: US internet and broadband penetration (connections per hundred population), 2003- 2013 101
Figure 10.35: The US mobile penetration (phones per hundred population), 2003-2013 102
Figure 10.36: Canada video gaming market size ($bn), 2003-2013 104
Figure 10.37: Canada internet and broadband penetration (connections per hundred population), 2003-2013 105
Figure 10.38: Canada mobile penetration (phones per hundred population), 2003-2013 106
Figure 10.39: China online gaming market size ($bn), 2003-2009 108
Figure 10.40: China internet and broadband penetration (connections per hundred population), 2003- 2013 109
Figure 10.41: China mobile penetration (phones per hundred population), 2003-2013 110
Figure 10.42: South Korea video gaming market size ($bn), 2003-2009 112
Figure 10.43: South Korea internet and broadband penetration (connections per hundred population), 2003-2013 113
Figure 10.44: South Korea mobile penetration (phones per hundred population), 2003-2013 114
Figure 10.45: Japan video gaming market size ($bn), 2003-2011 115
Figure 10.46: Japan internet and broadband penetration (connections per hundred population), 2003- 2013 116
Figure 10.47: Japan mobile penetration (phones per hundred population), 2003-2013 117
Figure 10.48: Western Europe video gaming market size ($bn), 2003-2013* 119
Figure 10.49: The UK internet and broadband penetration (connections per hundred population), 2003-2013 121
Figure 10.50: The UK mobile penetration (phones per hundred population), 2003-2013 122
Figure 10.51: France internet and broadband penetration (connections per hundred population),
2003-2013 123
Figure 10.52: France mobile penetration (phones per hundred population), 2003-2013 124
Figure 10.53: Germany internet and broadband penetration (connections per hundred population), 2003-2013 125
Figure 10.54: Germany mobile penetration (phones per hundred population), 2003-2013 126
Figure 10.55: India video gaming market size ($m), 2008-2012 127
Figure 10.56: India internet and broadband penetration (connections per hundred population), 2003- 2013 128
Figure 10.57: India mobile penetration (phones per hundred population), 2003-2013 129
Figure 10.58: Brazil video gaming market size ($bn), 2005-2008 130
Figure 10.59: Brazil internet and broadband penetration (connections per hundred population), 2007- 2013 131
Figure 10.60: Brazil mobile penetration (phones per hundred population), 2007-2013 132
Figure 10.61: Russia internet and broadband penetration (connections per hundred population), 2003-2013 133
Figure 10.62: Russia mobile penetration (phones per hundred population), 2003-2013 134
List of Tables
Table 2.1: Global video gaming market size ($bn), 2003-2013 30
Table 2.2: Global video gaming market break-up by geographic region ($bn), 2008-2013 31
Table 2.3: Top 15 video games publishers, (2008) 32
Table 3.4: Top 10 console software publishers by global shipments, (H1 2009) 42
Table 3.5: Top 20 console games by global shipments (m), (H1 2009) 43
Table 3.6: Global console shipments (m), 2006-2013 44
Table 3.7: Console hardware shipments by console (m), (2006-2008) 46
Table 3.8: Global online console market size break-up ($bn), 2008-2013 49
Table 4.9: Worldwide internet users and penetration, 2004-2008 54
Table 4.10: Worldwide broadband users and penetration, 2004-2013 57
Table 5.11: Worldwide mobile subscribers and penetration, 2004-2008 62
Table 5.12: 3G share of mobile phone subscriptions and revenues (%), 2004-2013 63
Table 7.13: Casual gaming market size ($bn), 2005-2007 73
Table 7.14: UK breakdown of gamers and non-gamers by age (%), (2008) 76
Table 10.15: The US - Key video game publishing companies, (2008) 103
Table 10.16: China online gaming market size ($bn), 2003-2009 108
Table 10.17: China online gaming break-up ($bn), 2008-2009 108
Table 10.18: China - key video games publishers, (2008) 111
Table 10.19: South Korea video gaming market size ($bn), 2003-2009 112
Table 10.20: South Korea - key video games publishers, (2008) 114
Table 10.21: Japan video gaming market size ($bn), 2003-2011 116
Table 10.22: Japan - key video games publishers, (2008) 118
Table 10.23: Europe - Key video game publishing companies, (2008) 120
Table 10.24: Brazil video gaming market size ($bn), 2005-2008 130
Table 10.25: South East Asia key statistics (connections per hundred population), (2008-2013) 135

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