Much has been made of the video game console business’ steady decline, and rightfully so; console sales have dropped considerably in recent months. Some attribute the sliding sales to a weakened economy while a minority believe trends are turning toward casual mobile gaming, but market research firm IDC says we shouldn’t be sounding any alarms just yet. In a new report, IDC suggests that console gaming will begin to reverse current downward trends in 2012, with a big-time resurgence to follow in the coming years. “Total console hardware and disc-based software revenues are on track to slide a few percent in 2011 compared to 2010,” Lewis Ward, an IDC research manager, said in a statement. “But prognostications that consoles have peaked as a product category are premature. I expect that the launch of the Wii U, a revamped interactive entertainment console from Microsoft in the 2014 timeframe, and the arrival of Sony’s ‘PS4’ circa 2015 – along with more than a few exclusive, innovative games – will help drive a new wave of console-centric spending in the next several years.” Of course the market could rebound even sooner than that. BGR reported exclusively that Microsoft may be preparing to unveil a new Xbox model as soon as E3 2012, and Sony could be fast-tracking plans for a new PlayStation 4 console as well. The Xbox is now six years old, Sony’s PlayStation 3 is five years old and Nintendo’s Wii is almost five years old as well. As quickly as technology now evolves, it shouldn’t be any mystery that console sales are currently waning. IDC’s press release follows below.
IDC Finds the Demise of Game Consoles Is Greatly Exaggerated
18 Aug 2011
FRAMINGHAM, Mass., August 18, 2011 – Despite recent macroeconomic instability and particularly weak overall video game spending in North America this summer, the latest International Data Corporation (IDC) forecast of the worldwide video game and interactive entertainment console market points to a rebound beginning in 2012, largely driven by new platform releases and rising console penetration and spending in select developing economies.
“Total console hardware and disc-based software revenues are on track to slide a few percent in 2011 compared to 2010,” says Lewis Ward, research manager, Consumer Markets: Gaming, at IDC. “But prognostications that consoles have peaked as a product category are premature. I expect that the launch of the Wii U, a revamped interactive entertainment console from Microsoft in the 2014 timeframe, and the arrival of Sony’s ‘PS4’ circa 2015 – along with more than a few exclusive, innovative games – will help drive a new wave of console-centric spending in the next several years.”
IDC forecasts direct global console hardware and disc software sale revenue will increase at a compound annual growth rate (CAGR) of 3.6% from 2010 to 2015, reaching $39.7 billion in 2015 with developing economy growth rates about twice those in developed markets. Despite this rebound, the installed base of actively used game consoles won’t keep pace with the number of worldwide households. IDC expects there to be about 257 million active consoles worldwide by 2015, or 12.7% of anticipated households that year, down about 1% when compared to same console penetration figure for 2011. In this sense, it’s possible to conclude that console popularity will slip due to the rise of media tablet gaming, casual, free-to-play/social online PC games, etc.
This IDC study, Worldwide Game and Interactive Entertainment Console Hardware and Software 2011 -2015 Forecast (IDC #229438), assesses and forecasts the demand for, usage of, and revenue associated with video game console hardware and software on a worldwide basis through 2015. It provides a competitive assessment of the leading current-generation console platforms based on survey data, interviews, and other research sources and models next-generation platform releases based on historical precedent and other inputs. Worldwide game console totals are broken down into four regions: North America, Western Europe, Japan, and the rest of the world.
The forecast also shows the PS3 will have the largest active installed base of any game console worldwide by 2015. In this sense, the PS2’s “long tail” may ultimately repeat.