Games will continue to represent the lion’s share of the Western European consumer PC CD-ROM software market over the next four years, according to Datamonitor’s new study CD-ROM Publishing in Europe 1997-2002. In 1997, games accounted for 70% of Western European consumer CD-ROM unit sales and 65% of revenues. However, due to rapid growth in the education and edutainment software sector, games’ share of total Western European consumer CD-ROM revenues will fall to 63% in 2002. Datamonitor estimates that a total of 36.5 million consumer CD-ROM software units, worth $1.8bn, were shipped in Western Europe in 1997. It forecasts that the market will grow by an average of 19% a year to 91.1 million units, worth $4.3bn, in 2002. Germany, the UK and France will remain the largest consumer Western European CD-ROM software markets over the next five years, respectively accounting for 30%, 19% and 17% of total sales in 2002. Assuming that DVD-ROM drives become standard in all new PCs next year and that sufficient publishers convert from CD-ROM to the new medium, DVD- ROM will dominate the disk-based software market from 2001, Datamonitor says. According to this scenario, 71 million of the total 91.1 million Western European consumer software units shipped in 2002 will be on DVD-ROM. Datamonitor says that the games software market will grow by an average of 18% a year from $1.15bn in 1997 to $2.65bn in 2002, while the education and edutainment software sector will quadruple from $190m to $795m in the same period. Despite only accounting for 4% of all consumer CD-ROM software units sold, the applications software market was worth $173m in 1997, representing 10% of total revenues. This reflects the fact that the average unit price of an applications program is at least twice that of any other type of consumer software. However, the applications software sector will grow by only 12% a year to $301m in 2002, Datamonitor says. Because most applications software titles are sold pre-bundled with PCs, the consumer applications market has a low replacement rate, which is exacerbated by high retail prices. Datamonitor predicts that the market for information titles will double from $253m in 1997 to $510 in 2002, with growth in lifestyle software compensating for low volume sales of encyclopedias and dictionaries. The Datamonitor study defines education software as adult education and curriculum-based titles, and edutainment as a cross-over between educational and children’s entertainment titles. Information software consists of reference, lifestyle and special-interest titles, it says, while applications software comprises personal productivity or desktop applications titles.
