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Survey: $580 Million In Console Download Revenues In 2007

According to a pair of new surveys released by IDC and IDG Entertainment (IDGE), the booming market created by online-capable consoles means that online console download revenues will surge from $133 million in 2006 to $583 million in 2007, with strong gr
According to a pair of new surveys released by IDC and IDG Entertainment (IDGE), the booming market created by online-capable consoles means that online console download revenues will triple from $133 million in 2006 to $583 million in 2007, with bigger increases expected in the future. Billy Pidgeon, IDC’s program manager for games research presented his report analyzing the booming popularity of online capable video game consoles, and projected that by 2008 the North American installed base of such consoles will be over 37 million units. “By the end of 2007, over 31 percent of online capable video game consoles in North America will be in active online use by 14 million online console gamers,” said Pidgeon. “The increase in revenue derived from the online use of game consoles, including subscriptions (mostly Xbox Live), downloadable content, and advertising represents the largest growth in the console software sector. In North America alone, online console revenue will triple from $133 million in 2006 to $583 million in 2007. Consumers are increasingly purchasing games by non-traditional means such as downloads or subscriptions.” IDC’s Pidgeon noted that the retail marketplace will need to shift in order to adapt to these significant changes in gamers’ purchasing behavior. In fact, IDC projects that video game console software sales through traditional third party online and retail stores will see a 19.5 percent revenue growth over 2006, whereas downloadable content will see a growth rate of 1,029 percent and subscription sales will increase “only” 158 percent. “In 2007, game-related downloadable content derived from manufacturers’ proprietary online console networks will reach $296 million, while subscription revenue will increase from $107 million in 2006 to $277 million,” said Pidgeon. “While software sales are still significant -- increasing from $8 billion in 2006 to $9.5 billion this year -- content sold, accessed, or downloaded online to video game consoles over manufacturers’ proprietary networks will remain the industry’s most exciting growth opportunity in this hardware cycle.” In addition to this report, IDGE released new information on the people purchasing games. IDGE’s marketing director, Simon Tonner, provided data from their third annual U.S. Gamer Segmentation Study on the five key gamer segments, based on their attitudes toward gaming, as well as their social characteristics, and purchasing habits. IDGE’s five gamer segments are as follows. Core Gamers: "Core Gamers choose gaming as their main form of entertainment and want to maximize their time gaming. They prefer gaming over going to the movies or out to dinner." Status Gamers: "Status Gamers are proud of their gaming skills and enjoy being the first to try the newest and hottest titles. They also like to discuss their gaming experiences at school or work." Social Gamers: "Social Gamers view gaming as a communal experience. They prefer to play games with people they care about, forming a social link, and coordinate social functions around gaming." Active Gamers: "Active Gamers prefer games where movements are reflected in the game and allow gamers to get out of their chairs. They use gaming as a physical release." Casual Gamers: "Casual Gamers use gaming as an emotional release and as a way to play different roles. Casual gamers view gaming as a secondary form of entertainment and don't feel the necessity to be the first to try a new game." “Besides differentiating psychographic profiles, the key gamer segments we identified also differ in their spending habits. ‘Status Gamers’ have spent the most on video games and systems over the past 6 months and are expected to spend the most in the next 6 months with ‘Core’ and ‘Active’ gamers close behind,” said Tonner. “In the past 6 months alone, ‘Status Gamers’ have spent, on average, $296.20. On the opposite end of the spectrum, ‘Casual Gamers’ have spent $82.20 over the same time period.”

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