DFC Intelligence Reports Video Game Software Global Revenues to Grow to $70 Billion by 2017

June 05, 2012

Report Predicts PC-based Game Revenues to Lead Industry, Driven by Growth in Digital Distribution Among Core Gamers

 

Los Angeles, CA- June 06 2012:

 

DFC Intelligence today revealed new research predicting global revenue from video game software will grow from $52 billion in 2011 to $70 billion in 2017. This revenue growth will be split between three broad platforms: personal computers (PCs) leading with 39% of revenue, TV-based console systems with 36% of revenue, and mobile devices with 25%. DFC Intelligence also forecasts that by 2017, 66% of game software will be delivered digitally with packaged games accounting for only about one-third of revenue. The new findings were announced during the 2nd Annual Global Game Industry Forum in Los Angeles.“

 

While the game industry is expanding on all fronts with new demographic groups playing games on a regular basis, the core consumer still remains male, age 12 to 30,” says David Cole, CEO of DFC Intelligence. “In every segment, the key growth factor is improving access and monetization capabilities to that core demographic. Digital distribution, already widely accepted among core gamers globally, is clearly broadening access to products and driving much of the industry growth.”

 

For the past five years, DFC Intelligence has been working with such companies as Xfire, Live Gamer, GamerDNA and others to better understand global consumer behavior. The game industry is spread over multiple platforms, in many diverse markets, so it has been hard to quantify exactly what consumers are doing. By working with globally focused companies with actual consumer usage and purchase behavior, DFC has been able to look at the global market on a detailed level, particularly with PC, free-to-play and social games.

 

To quantify the success of new PC products, DFC worked with Xfire. In the past year, the PC game market in North America and Europe has seen record usage of products like League of Legends, Diablo III and Minecraft. These games, with no retail presence, have consistently seen as many as one million active users a day.“DFC is the ideal partner to help Xfire analyze gameplay data from our user base of more than 21 million gamers in North America, Europe and Asia” said Malcolm CasSelle, CEO, Xfire. “Xfire has a deep insight into game trends because our app natively tracks the number of players – and hours played – for each title, by country. Xfire tracks the growth trajectory of new titles at launch, including which titles keep a share of gamer’s time, and which games get dropped in favor of newer titles.”

 

As the market migrates to online distribution, free-to-play (F2P) has seen a dramatic spike. In order to better understand how revenue can be generated in F2P products, DFC Intelligence has partnered with Live Gamer, the leading global gateway micro-transaction payment system for many of the leading F2P games. In studying transaction data from F2P games DFC discovered purchase behavior of core consumers of an F2P game is much like it is for a traditional boxed retail product. “Gamers tend to make purchases several times a year in bulk sums of around $20 to $50. A successful game should count on an average paying consumer spending $75 a year for two years,” adds Cole.

 

Mobile devices and social networks such as Facebook feature many free options that allow consumers to avoid paying entirely. In order to better understand attitudes towards these platforms, DFC Intelligence has been surveying core gamers for the past three years. The latest survey indicates that while core gamers are embracing mobile devices in growing numbers, they are not satisfied with the games in social networks like Facebook. DFC forecasts that games in browser and social networks will exceed $8 billion in revenue by 2017 but that growth is dependent on having stronger appeal to core gamers. “The bottom line is core gamers spend money on products they like and right now the game offerings on sites like Facebook are simply not appealing to that demographics,” said Cole.

 

The 2nd annual Global Gaming Industry Forum is sponsored by DFC Intelligence, Intel, the PC Gaming Alliance (PCGA) and Zebra Partners. In addition to the discussion of the research led by DFC Intelligence, Xfire and Live Gamer, a second panel moderated by Perrin Kaplan of Zebra Partners and featuring Dusty Welch, CEO of U4iA Games, Matt Ployhar, President of the PCGA and Senior Product Planner at Intel, and Dan Offner, a noted game attorney at Loeb and Loeb looked in detail at the issues faced with online distribution models.

 

About DFC Intelligence

 

DFC Intelligence is a strategic market research and consulting firm focused on interactive entertainment and the emerging video game, online game, interactive entertainment and portable game markets. Since 1995 DFC has published in-depth strategic market reports and subscription-based research services. DFC research is used by more than 300 leading companies in over 30 countries worldwide. To sign-up for a free sample of DFC research go to the following form.

 

About Xfire

 

Xfire™ is a venture-backed company based in Santa Monica, Calif., Shanghai, and Chengdu, China. Providing a feature-rich online community platform that transports gamers’ social networks into thousands of PC games, Xfire caters to hardcore players, allowing them to connect, share and compete with others gamers across titles and around the world. The site currently has more than six million active monthly users worldwide, and is the first and only company to support in-game chat for customers using Chinese and Korean characters. For more information, please visit http://www.xfire.com.

 

About Live Gamer

 

Live Gamer is the world’s first combined digital commerce and advertising platform. With an advanced microtransaction and virtual economy engine, global payment gateways, worldwide ad network and video incentive advertising platform, Live Gamer helps online entertainment companies drive maximize revenue from their content, and connects advertisers to a network of over 48 million users. Live Gamer’s technology has been adopted by leading publishers in gaming, entertainment and social including Facebook, Electronic Arts, EMI, Take 2, Sony Online, Namco Networks, REAL Networks and THQ. Advertisers on the Live Gamer Media network include Blizzard, KFC, Best Buy and Sony Computer Entertainment. For more information on Live Gamer and its Elements, Ad Elements, and gamerDNA media services, please visithttp://www.livegamer.com.



 
 
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