Video Game Industry Overview - Changing Competitive Equation

• Publication date: June 2008
• Report size: 30 pages

The video game market has continued to evolve with each passing cycle because of its unique characteristics of being seasonal as well as cyclical. As a result of these characteristics, industry players like Sony Corp, Nintendo and Microsoft launch new consoles every few years that are followed by a slew of new games from the software publishers. With the introduction of innovative products comes the benefit as the video game market has gr...

The video game market has continued to evolve with each passing cycle because of its unique characteristics of being seasonal as well as cyclical. As a result of these characteristics, industry players like Sony Corp, Nintendo and Microsoft launch new consoles every few years that are followed by a slew of new games from the software publishers.

With the introduction of innovative products comes the benefit as the video game market has grown by 50% in the period 2004 to 2006. The growth in this industry is driven by the increased hours of video game consumption that are taking time away from other forms of entertainment, including radio, recorded music, daily newspapers, consumer magazines, and consumer books.

Also, survey suggests that nearly half of the U.S. population have played videogames. But besides growth in the developed economies, gaming console industry is also seeing huge adoption in the emerging economies especially BRIC (Brazil, Russia, India and China) countries.

With increasing adoption, preferred channels for purchasing video games have changed over the years – consumers are more attracted towards mass merchants and consumer electronic stores for their purchases now.

The competitive landscape of the video game market has also changed with Nintendo and Microsoft threatening the dominance of Sony. In the next generation video game industry , Microsoft’s Xbox 360 and Nintendo’s Wii are major improvements over their respective prior video game console offerings, and for the first time in nearly a decade create respectable alternatives to Sony’s video game consoles.

As a fallout of the changing scenario, it is likely that by the year 2008, video game console industry will be evenly divided between the Nintendo, Microsoft, and Sony consoles, with Nintendo taking the lead beyond 2008.

The report is a study of the global video game industry covering the growth of the market over the years. It analyses the changing consumption pattern for this format of entertainment among the different age groups in different regions. The share of the current generation of video game and the next generation has been analyzed and also the industry positioning of the leading brands assessed. The report also highlights the challenges faced by the leading players and the potential that lies in the online gaming space.

Global Video Game Industry

I. Industry Definition

I. 1 Market Value and Growth Rate

I. 2 Growth of Video Game Market by Geography

United States
Europe
Japan
Rest of the World

I. 3 Video Game versus Movies–Most preferred Entertainment Source?

II. Supply Chain of the Video Game Market : Major Stakeholders

III. Game Console Hardware Industry

IV. Game console Software industry

V. Industry Trends

Old gamers’ interest continues to rise
Rise of casual games
Favorable demographics – Increasing youth and longevity
Teenage girls also a large targeted sector

VI. Revenues Channels for Video Game

VII. Industry Challenges

Hardware pricing affects console sales
Short period life cycle
Dependence on selected sales channels
New entrants pose serious challenges
Consoles generally sold at a loss in the early life cycle

VIII. Competitive Environment : Current and Next Generation

9. Industry Player Profiles

9.1 Sony
9.I. 1 Sony PlayStation 3 (PS3)
9.I. 2 PS3 – Industry Positioning

9.2 Nintendo
9.II. 1 Nintendo Wii
9.II. 2 Wii - Industry Positioning

9.3 Microsoft
9.III. 1 Microsoft Xbox
9.III. 2 Xbox – Industry Positioning

10. Online Gaming – Providing potential revenue source

1I. Industry Projection

Table and Figures

Figures
Figure I. 1 Global video game market sales: 2000-2006
Figure I. 2: Global Video Game Industry Share by Geography – 2006
Figure I. 3: Revenue Comparison: Video Game versus Box Office: 2000-06
Figure III. 1 Global Video Game Hardware Market Revenues : 2004-06
Figure III. 2: Gaming Consoles – Comparison of US, Europe & Japan: 2006-08
Figure III. 3: US Game Console Hardware Industry : Feb'07
Figure IV. 1: Global Video Game Software Market Revenues : 2004-06
Figure V. 1: Video Game playing by age group – Survey Findings
Figure VI. 1 US Video Game Revenues by Channels: 2004-06
Figure VIII. 1: Video Game Current Generation Industry Share
Figure VIII. 2: Video Game Next Generation Industry Share
Figure 1I. 1: Global Video Game Market Revenues : 2006-10

Tables
Table I: Percentage Share of Global game console hardware industry : 2005 & 2010
Table II: US - Average time/week adult gamers play games
Table III: Most Popular Videogame Titles – 2006
Table IV: US children's video game playing by age group and gender – 2007