Report Shows Game Subscription Revenue Surge

Analyst firm DFC Intelligence has produced a new report suggesting that subscription revenue from online games has risen to $2 billion in 2005 and will increase further to $6.8 billion by 2011, with advertising and digital distribution revenue also expected to grow significantly. Over 50 percent of online game subscription revenue in 2005 came from Asian countries not including Japan – primarily South Korea, China and Taiwan. Although North American subscription revenues are expected to exceed Asia by 2011, the markets are predicted to remain very different, with 29 percent of worldwide revenue coming from home consoles, even though non-Japanese Asian markets are still expected to be almost entirely PC based. This will continue to result in a bifurcated worldwide market where Asian revenues are dominated by local publishers such as the $300 million revenue giant NCsoft and others such as Netease, Nexon, Shanda and Webzen. The report is less clear in its predictions for the likely Western online leaders, noting only the exceptional success of Vivendi Universal Games/Blizzard, and name checking other companies such as Sony Online Entertainment, Mythic and PopCap. The report even goes out of its way to note that despite the relative success of Electronic Arts’ Club Pogo casual gaming service, as it accounted for revenues of only $55 million – 1.7 percent of the company’s $3.1 billion total for fiscal 2005. In conclusion the report is non-committal on the short term impact of online subscription revenues for established publishers, pointing out that online gaming has been seen as the future of the industry for over a decade, and thus far has still played only a relatively minor role in existing publisher’s portfolios.