[MoMoBangalore] {Spam?} Article: Digital Distribution Key to Online Game Market Growth

Thu May 31 09:12:36 IST 2007

Digital Distribution Key to Online Game Market Growth

May 30, 2007

When it comes to online games, a common perception is that the money is
in the big budget high-end monthly subscription games.  Of course, this
is not necessarily a misperception.  The largest online game companies
such as Blizzard Entertainment, NCsoft, Sony Online Entertainment and
Shanda Entertainment, now generate hundreds of millions of dollars in
annual revenue from high profile massively multiplayer online games
(MMOGs).  Nevertheless, according to the latest DFC report Online Game
Market Forecasts 2007
http://www.icebase.com/go.shtml?20070530074609955885&m10610&http://www.
dfcint.com/game_article/../game_report/online_game_forecasts_toc.html> ,
the fastest growing segment of the market in 2006 was digital
distribution/virtual item sales.

In 2006, DFC estimates that the worldwide online game market was $4.5
billion.  DFC forecasts that by 2012 the worldwide online game market
will pass $13 billion.  However, there will a significant difference in
growth among regions, platforms and game genres and revenue will come
from an increasing range of business models and products.

Subscription revenue remains the largest portion of the market.
However, by 2012 it is forecasted that consumer spending on digital
distribution and virtual items will account for over 40% of revenue.
For PC games, digital distribution is expected to become the leading
business model in East Asia.  However, the video game console systems
are expected to see strong growth in digital distribution and by 2012,
revenue from digital distribution on console systems is expected to pass
$1 billion. 

Some other key points from the Online Game Market Forecasts 2007
http://www.icebase.com/go.shtml?20070530074609955885&m10610&http://www.
dfcint.com/game_article/../game_report/online_game_forecasts_toc.html>
report worth noting:

*      Broadband penetration in the twenty leading online game countries
is expected to increase 48% from 2006 to 2012.

*      The total overall number of online gamers in the twenty leading
online game countries is expected to increase 51% from 2006 to 2012.  

*      East Asia, which includes the leading markets of China and South
Korea, is currently the leading region for online games, accounting for
nearly half of revenue in 2006.  However, Europe and Japan are showing
strong market share growth. 

*      Worldwide online game revenue is expected to increase from $4.5
billion in 2006 to $13.1 billion in 2012, a 192% increase.  The PC is
the leading platform for online game revenue, but revenue from console
online games is expected to show significant growth between now and
2012.  

*      In 2006, subscriptions were the leading revenue source for online
games.  However, the fastest growing segment of the market was digital
distribution and virtual item sales

*      By 2012, revenue from advertising and digital
distribution/virtual items are expected to equal revenue from
subscriptions.  

*      The two leading categories for online games are MMOGs and casual
games.  On a worldwide basis, MMOGs accounted for over half of online
game revenue in 2006.  However, in terns of market share growth between
2006 and 2012 the fastest growing game segments are expected to be First
Person-Shooters (FPS/Action) and Sports/Racing.  

*      North America is the largest market for online game advertising.
By 2012, video game console systems are expected to account for 35% of
online game advertising revenue in North America.

*      Japan is the fastest growing market for online game subscription
revenue.

*      East Asia is the leading market for virtual item sales and is
expected to continue to be the leading market for digital distribution
in 2012.  However, between 2006 and 2012, Europe is expected to be the
fastest growing market for digital distribution and virtual item models.

Arya P Bhattacharya - Communication & Hi-Tech
perot systems
Plot3, Sector-125, Noida
arya.bhattacharya at ps.net arya.bhattacharya at ps.net> 
Phone      : +91-120-2432750-79 || Xtn-3751
Fax          : +91-120-2430545
Mobile     : +919818175535 || +919911233001

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