Demand for games consoles is destined to decline after 1998 as multimedia personal computers with gaming capabilities gather market share, according to a new report by consultants Datamonitor. The market for dedicated consoles will increase in size by $415m between 1996 and 1998, when it will peak at a total of $1.4bn says the report. Despite the predicted launch of new platforms by Sega Enterprises Ltd and Sony Corp, however, the market for dedicated consoles is forecast to decline after 1998. This is due to the increased penetration of multimedia personal computers in the European market and the development of technology that will increase their ability as games machines. By the year 2002, the market will be worth $856m. Of this total, 71% will be accounted for by platforms which have yet to be released – the Sega blackbelt and the Sony Playstation 11. The N64 will represent 19% and the Playstation 10%. Trip Hawkins, chairman and chief executive of 3DO Co is more optimistic about the market. He told attendees at the Electronic Gaming Summit held in Napa, California recently that the video console market will experience huge growth in the next few years. Hawkins predicted that the console market would enjoy explosive growth, initially from hardware sales, which will then fuel growth in the software market. But he added that the overheads of companies in the industry overall remains too high, and developers and publishers will have to tighten their belts to survive. Those who don’t will disappear, ultimately strengthening the industry, he said. Game titles and retail store locations will also shrink in number.
