New Report Predicts Major Growth for Gaming Industry
Online Sales Power Revenue Explosion
The economy might still be in the tank, but don't tell that to gamers. According to a new report, video game sales are expected to jump more than 20 per cent between 2010 and 2016.
Last year, video game sales were $66.6 billion -- an enormous total surpassing the military budgets of most Western nations (in fact, it's more than three times what Canada spends on its armed forces each year).
However, according to industry analysts at DFC Intelligence, that number should grow 21.6 per cent between now and 2016, reaching a new total of $81 billion.
The DFC Intelligence sales prediction was announced last week as part of its annual Worldwide Market Forecasts provided to the Video Game and Interactive Entertainment Industry report. DFC Intelligence arrived at their forecast by analyzing several revenue types in the gaming industry, including both digital and physical software as well as hardware.
The analysis and forecast isn't just limited to PC games and major home consoles (like the Microsoft Xbox 360, Sony PlayStation 3, or Nintendo Wii), but also includes software sales on smartphones, tablet computers, and even portable music players like the iPad Touch.
So, how is it that the video game industry will see such an explosion in sales, even as the world continues to bear the weight of a nagging recession?
According to DFC Intelligence, the gaming industry should be credited for its increasingly diversified portfolio. It's now possible to download a game in multiple formats; the title Angry Birds, for instance, is available right now on tablet computers like the HP TouchPad, smartphones like the Apple iPhone, and home consoles like the Xbox 360.
"Overall the game industry is becoming more diversified and global as it continues to grow," said David Cole, an analyst for DFC Intelligence. "This makes the industry challenging because it is hard to know where to place one's bets. At the same time, there are many niches of opportunity that didn't exist in the past."
Not surprisingly, the area of most substantial growth in recent years has been online sales. Ten years ago the CD or DVD was an indispensable tool for most video game companies, but now thousands of titles are released each week to online platforms like Microsoft's Xbox Live or Sony's PlayStation Network. Downloadable games like Limbo and Toy Soldiers aren't even available on DVD, but this has hardly detracted from their appeal.
Overall, it's expected online sales in the gaming industry will increase from just under $20 billion last year to $37.9 billion in 2016. Meanwhile, DFC Intelligence is predicting a significant slide for retail sales, from $58 billion in 2008 to just $43 billion in 2016.
All in all, good news for the gaming industry but troubling predictions for major tech retailers like Best Buy and Amazon.com who will need to adapt to the new environment.
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