Every February, DFC Intelligence looks to assess the performance of the previous year and issue new video game market forecasts. Last year, the video game market performed better than expected. However, investors are leery of the future potential for the industry. In order to help people better understand the game industry opportunities, DFC is launching a major new segmentation for its forecast.  This includes forecasting new video game platforms that have not even been announced.

Over the past several years, DFC forecasts have been broken out by:

1. Platform: Console (with each major game system as a sub-category), PC and mobile (iOS and Android)
2. Business Model: Free-to-Play, Subscription and Pay-to-Play
3. Distribution: Packaged and Online Distribution
4. Country and Region: 35 countries and regions

DFC will continue with his breakout. However, we will also be expanding our sub-segments in an effort to get more granular. For one, we will be looking to forecast, upcoming platforms, which have yet to be announced.

Of course, over the years we have always tried to forecast new console game systems. The challenge this time is that game systems are not likely to look like we have seen in the past. In addition, there are likely to be major new entrants in the game hardware business

These type of forecasts will involve significant speculation. However, it is crucial to make these forecasts to understand the strategic future of the video game industry. DFC Intelligence will lean toward the conservative side. Nevertheless, we feel new game systems have the potential to revolutionize the game industry in ways investors have been impatiently waiting for. Much of this could involve systems that have greater overlap with the PC and mobile game markets.

This gets to our other main new way to segment the video game industry. Currently, the segmentation between console, PC, and mobile skews the size of the industry. Mainly it overstates the mobile opportunity. Investors have punished companies like Activision Blizzard, Electronic Arts, Nintendo, and others because they feel they have missed the mobile train.

In fact, mobile games are a diverse and highly segmented market. The opportunity for any given company or product is more limited than the wild success stories would have one imagine.

The goal of our new market segmentation is to beak the overall market into 8 major segments. This will include some overlap between console, PC and mobile. Games like Fortnite work across all the major segments and our goal is to size those type of market opportunities.

On a macro level, this is not an easy task. It involves taking a close look at several thousand individual products and understanding how they monetize. From there we need to further classify several hundred thousand products on a broader level.

Our goal is not to have 100% accuracy, but instead, provide a strategic framework to begin more detailed market analysis. DFC believes that there is likely to be a major change in the current video game market structure. Many newcomers are likely to arise to take market share from established players. However, there are also significant growth opportunities that all companies can look to take advantage of.

Investors are rightly concerned about the future potential of established game companies to maintain their current position. But a new framework is required to understand the growth prospects for individual products and companies.
DFC is developing these forecasts based on input from many of our clients. This is an ongoing interactive project and we welcome any input. Stay tuned as we provide more detail!

The new forecasts are part of the regularly updated Worldwide Video Game Forecasts.