New research reveals that consoles and iTV will overtake PCs as the main online games platforms.
New Datamonitor figures show that in 2001, the combined online and iTV games industry in Europe and the U.S will be worth $174 million. But by 2005, it will grow by 138% per year to reach $5.6 billion in 2005.
The number of online gamers in Europe and the US will grow from over 13 million in 2001 to more than 111 million in 2005, driven by the emergence of console online gaming, greater broadband access and a greater variety of games. More importantly, because of the failure to generate revenues from online advertising, the online gaming industry will have to charge users to play. By 2005, subscriptions and pay per play will represent almost 90% of the revenues of the market.
At the same time, iTV gaming will develop rapidly. By 2006, iTV gaming in Europe and the US will generate revenues of almost $2.7 billion. Europe will be the largest market for iTV games with revenues of $1.5 billion due to its initial lead in this market.
The games industry will have to rethink its strategy completely. Firms that currently offer online games will need to work out how move towards a content-charging model without alienating existing customers, and while still attracting new players – especially on console platforms.
They must also consider how best to attract iTV customers. One of the biggest sources of appeal for iTV games will be the ability for TV watchers to participate in contests linked to the popular shows or series they regularly watch. These enhanced TV games will generate revenues through sponsoring or by charging users a nominal fee to enter these contests in the hope of winning prizes – or more original rewards such as participating in live shows.
The television has traditionally been the center of entertainment in the home and this will help the rapid uptake of both consoles and iTV. Games industry players must focus their strategy on the television audience.
