Big Game, Big Revenue

Two new reports agree that if you want to get more money from your subscribers, you should get with the joystick.

by Robyn Greenspan Managing Editor of Cyberatlas [March 20, 2003]

Analysts are urging companies not to look past the gaming market for huge revenue potential, and In-Stat/MDR estimates hundreds of millions—and eventually billions—of dollars will be generated by the industry.

"Online gaming is a real industry, which will make real money, and has some fairly significant consequences for the companies involved," says Eric Mantion, a senior analyst with In-Stat/MDR.

Analysis from Jupiter Research (a unit of this site's corporate parent) finds that the average console user has aged from 19 to 23, and this slightly older market represents greater disposable income, along with a desire for more mature game themes.

"Jupiter Research estimates that the already extensive market for PC, console, and handheld games will grow 18 percent by the year 2007, with 61 percent penetration—from 162 million to 183 million U.S. game users," said Jupiter Research Director, Michael Gartenberg.

Gartenberg and other Jupiter analysts will explore the industry further at the Game Market Watch Conference, scheduled for April 2003. "This growth creates numerous opportunities in the industry and Game Market Watch Conference will offer unique and comprehensive insight into this market," continued Gartenberg.

In-Stat estimates that gaming accounted for roughly 9 percent of American backbone traffic in 2002, and companies—broadband service providers, in particular—that don't make plans to capitalize on this market are in danger of missing the revenue opportunities.

"The biggest risk to any company that is even marginally affected by online gaming is to dismiss it out of hand or put plans on the backburner until they think it matures. There are a lot of companies that are working very hard to grow this industry quickly so, odds are, they will help to move things along, faster than some expect," commented Mantion.

In-Stat placed the online console market at roughly a 9 percent penetration rate by 2007, but projected that countries with higher than average broadband adoption rates—the U.S., Japan, and Korea—would also see a larger than average console user population.

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