San Diego, CA -- June 25,  2003

In the new report, The Online Game Market 2003, DFC Intelligence forecasts that the worldwide online game market will grow from $875 million in 2002 to over $5 billion in 2008.  It is expected that this growth will be driven not only by PC-based subscription services, but also the rapidly growing number of video game console systems that can go online.  By 2008, DFC Intelligence forecasts that the installed base of online-capable video game systems will be over 100 million worldwide.

The other major factor driving online game growth will be increasing broadband penetration.  According to David Cole, president of DFC Intelligence, “the year 2002 saw solid growth for broadband in the home.  This has been especially true in markets like South Korea and Japan where the growing base of broadband users is really driving online game usage.  It appears online games may be the ‘killer application’ for bringing broadband to the home.”

The report forecasts that the usage of online games will reach 35 billion hours by 2008, an increase of 450% from 2002.  By 2008, DFC Intelligence forecasts that there will be 198 million people playing online.  These users should be divided fairly equally between North America, Asia and Europe.

However, growing consumer usage does not always translating into more revenue and profits.  According to Cole, “while it has been proven that individual online games can generate in excess of $100 million a year with a 50% operating margin, that is the exception not the rule.  Many services build a large user base that does not generate revenue.  On top of that, there is a serious glut of products on the market.”  The report spends a great deal of time examining different revenue generating models and experiments, including many case studies of failed services.

The 475-page report (for a table of contents click here) contains complete forecasts to 2008 for the online game market in North America, Asia and Europe.  There is also a detailed look at business models, subscription services, advertising, operating costs, digital distribution, online game genres, online console gaming and company profiles.  DFC Intelligence is a market research firm focused on video games, PC games, online games and interactive entertainment.  They offer free monthly research briefs to anyone signing up at http://www.dfcint.com/mailing_signup.html.     

CONTACT:
David Cole
858-780-9680