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Study: Connected Consoles To Reach 79 Million By 2012

79 million home consoles will be actively online by 2012, says a new Screen Digest research study -- which finds that the current console generation is merely a "transitional" phase with much more market to be explored.
79 million home consoles will be actively online by 2012, says a new Screen Digest research study, which means developers will see a substantial expansion in the addressable digital audience before the end of the console generation. But the study says that although users will download more game content, it's far too early to call a wide shift toward digital distribution. According to Screen Digest, these users will only spend about $1.2 billion on full game downloads by 2013 -- only 11 percent of a total console software market "still dominated by packaged media". Although numerous developers are implementing alternate revenue streams like add-ons, microtransactions, subscriptions and advertising dollars, Screen Digest says these initiatives won't begin to truly bear fruit until the next console generation. This is because the revenue increments from these methods are relatively small and take time to implement, continues the study. The net effect is that there's far more room to grow in the online space before it's "comprehensively commercially exploited to its full potential." Rather, the current console generation is acting as a seeding ground for digital delivery and emerging business models. "The eager online adoption of these devices already offers the industry a formidable active user base for its content and services," notes Screen Digest. "Even so, the speed at which the online console market develops depends largely on key members of the traditional games value chain." These "key members," the study finds, may be gumming up the works. Screen Digest identifies several "bottlenecks" in the growth path of the online console market -- manufacturers need to continue expanding service offerings, publishers are "reticent to exert pressure" on retail partners, and retailers themselves tend to see a shift to online dominance as a "substantial threat." Screen Digest senior analyst and games head Piers Harding-Rolls explains: "While the online console market is growing strongly and will provide welcome revenue in later years, today’s consoles have been consigned to the important but ultimately limited online market role of ‘transitional’ devices as the industry only slowly makes its way to a more online-console oriented framework." "There will be a substantial addressable online market to exploit towards the end of the cycle," says Harding-Rolls, "but it is likely that this opportunity will remain significantly untapped and it won’t be long before the industry will be forced once again to prepare itself for the next generation of hardware."

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