JULY 1, 2014 • Following this year’s Electronic Entertainment Expo (E3) in Los Angeles, DFC Intelligence is now projecting significant gains for core hardware and software products worldwide. As a result DFC continues to raise its video game forecasts for 2014 and beyond in both the console and PC segment. Overall game software revenue from PC games, console games and mobile games are expected to go from $64 billion in 2014 to $100 billion in 2018. With a great deal of platform overlap amongst the 1.4 billion total gamers worldwide, DFC estimates there are 1.17 billion global PC gamers. So while console hardware spending will be dominant in 2014, PC games will benefit from the rise in new console purchases as new hardware drives spending on new software. What’s more, the number of core gamers is increasing in more markets around the globe, which will increase the drive for high-end hardware and AAA software as core gamer spending is reaching record highs. These forecasts were drawn from DFC’s E3 2014: Return of AAA Titles report.
Impact: Much has been written about the mobile game juggernaut yet what we are finding is that core games and hardware are what is driving spending. Don’t get us wrong, casual mobile content is a huge aggregate contributor to revenue – growing from $10 billion in 2013 to $29 billion in 2018 – but at that 30% level in 2018, mobile titles are a supplement to but not a replacement for core games. Where mobile is driving revenue is in emerging markets as has been seen in the BRIC countries. Even so, the trends show that core video game hardware will follow in behind and start to drive content trends. We can see that in markets such as Brazil where Xbox Ones are already in local production. In cases such as China where core computer games are already dominant via the freemium model, mobile is bringing in new consumers who will gain access to core hardware as better wages spread further into the populace. The takeaway we are seeing is that there was a great deal of pent-up demand for core product that the latest console generation is facilitating. While 10-year console cycles are attractive from a manufacturing cost perspective, consumers appreciate something new to spend their money on.