February 24, 2016

SAN DIEGO, CALIF. – DFC Intelligence just released its new forecasts for the video game console market through 2020, and if you have been following our briefs over the past few months it should come as no surprise that the PlayStation 4 is expected to command a dominant position over the next five years. In 2015, the PlayStation 4 matched DFC’s forecast released this time last year while the Xbox One and the Nintendo Wii U fell slightly short. DFC is now forecasting that the PlayStation 4 will join the elite club of console systems that sell over 100 million hardware units during its lifespan.

Of course, a major change in the console market is the movement away from a pure packaged goods business model to digital distribution business models. This has opened the opportunity for companies that previously could not enter the console game market to gain widespread distribution. This opportunity is a major focus of the report as online distribution channels are expected to equal and surpass traditional packaged models over the next few years. By 2019 DFC forecasts the Xbox One and PlayStation 4 will generate about $20 billion in annual game revenue with about 50% coming from digital sources.

The big wild card in the mix is the new system from Nintendo, currently called the Nintendo NX. The report contains preliminary forecasts for the system but it still remains very much an unknown. DFC believes Nintendo is still a major player to watch in the game market but thinks that the company may not be ready to launch a new game system at this time. The other area to watch is the potential entry of new companies in the game space, especially Amazon, Apple or Google. These are all major factors that have resulted in a lowering of expectations for all manufacturers except Sony.

Of course, virtual reality (VR) is currently the big news item and its potential impact was examined. Overall VR is not expected to have a big impact on the console market. Sony has the biggest VR play with the PlayStation VR but that is only one of several reasons why the PlayStation 4 is expected to be the leading game system over the next few years. VR could actually help the PS4 expand its audience over the next few years but it is currently not crucial to the overall forecasts as DFC is taking a conservative attitude towards the market.

The console game market is only one segment of the overall game market picture but it does have its own issues and challenges. However, it increasingly is becoming an opportunity for online developers that in the past only focused on PC and mobile games. DFC has complete breakdowns for all market segments in over 30 global markets. This data is available via reports, spreadsheets or database access. The new report is available individuallyor as part of a package.