Games are Serious Business

Jupiter Research is predicting that global revenues from game consoles will continue to eclipse revenues from PC games, and that the industry will have passed $10 billion in combined annual revenue by the end of this year.

by Robyn Greenspan Managing Editor of cyberatlas.internet.com [November 4, 2002]

For many, life is a game, as research is finding that more and more people are using PC and console entertainment systems. In-Stat/MDR estimated that the game console market reached revenues of nearly $7.4 billion in 2001 with 31.8 million units shipped, and Strategy Analytics predicts global shipments of 41.9 million units in 2002.

Sony's Playstation 2 (PS2) accounts for 63 percent of sales, followed by Nintendo's GameCube with 21 percent and Microsoft's XBox with 16 percent. By the end of 2002, 72 percent of global cumulative shipments will be PS2 systems, compared to 16 percent GameCube and 12 percent XBox.

"This is a race for second place," says David Mercer, vice president, Broadband Practice at Strategy Analytics. "The question now is whether the market can sustain three players in the longer term."

Jupiter Research (a unit of this site's corporate parent, Jupitermedia) found that roughly 10 percent of online adults currently own a game system and, surprisingly, the average age of console owners is 23.

Of the 155 million game users that are currently estimated, 8 percent classify themselves as high-intensity users, spending 15 or more hours per week playing games, and this segment is expected to grow more than 40 percent from 12 to 17 million by 2007.

The majority (44 percent) are light users at 2 to 5 hours per week with Jupiter finding an average of 3.3 hours per week. Almost one-quarter (24 percent) fall into the medium user category at 5 to 15 hours per week, and another 24 percent are occasional users at less than 2 hours per week.

Michael Gartenberg, research director at Jupiter Research, cited price and title selection as key differentiating elements among consoles and predicts that value-added bundles, such as software/hardware combinations and rebates, will contribute to penetration.

The overall games audience is expected to grow 18 percent with 61 percent penetration in 2007, but PC gamers will outnumber console gamers (left). Jupiter's analysis of the market indicated 1.05 million PC gamers compared to 0.82 million console gamers in 2002, growing to a larger disparity of 1.32 million PC gamers versus 1.03 million console gamers in 2007.

Despite having fewer users, Jupiter Research predicts that console revenues will significantly eclipse the PC.

— End