Gaming and the Internet Maintain Collision Course

The convergence of videogames and the Internet continues, with 60 percent of ganming households showing high interest levels in online gaming, according to a report by International Data Corp. (IDC).

IDC’s report, “Trends Today, Insights for Tomorrow, IDC’s 2001 Videogame Survey,” predicts the videogame industry to be a $21.1 billion market by 2003. Interest in using the Internet to add to the gaming experience was even higher than average among users of next-generation consoles such as Sony’s PlayStation2 (PS2). Sixty-five percent of PS2 users showed an interest in online gaming. Additionally, the ability to download games from the Internet was of high interest among 76 percent of respondents.

“The availability and adoption of broadband in U.S. households is definitely influencing online gaming,” said Schelley Olhava, IDC senior analyst for Consumer Devices and Gaming research. “Broadband households have much higher interest levels in online gaming activities and are prime targets for an array of gaming options and services.”

Although IDC found only 6.5 percent of videogame households have broadband access, that penetration will continue to grow, which bodes well for next-generation consoles that are basing online gaming efforts on broadband communication.

The survey also revealed the changing face of the videogame user. Although young men remain the majority of gamers, young women are also working gaming time into their entertainment schedules. According to the survey, a relatively high proportion of female teenagers are primary players on key platforms such as PS2 (9.1 percent) and the Sega Dreamcast (11.4 percent). Unlike their male counterparts, who enjoy the excitement of the latest football release or video invasions from outer space, female gamers prefer classic arcade and city/business simulation games.

Additional findings from IDC’s report, which was based on interviews with 350 primary gamers, include:

  • The average gamer purchases 1.4 new games per month
  • About one-third of gamers read gaming magazines (the most popular magazine cited was GamePro)
  • More than 35 percent of gamers purchased at least one peripheral over the past six months
  • Advertising outweighs the influence of word-of-mouth among gamers.

With an increasing number of gamers using various devices, what’s next? According to a report by Datamonitor, it may be taking the games wireless. Already popular in the Asia-Pacific region, combined wireless gaming revenues from the United States, Europe and Asia-Pacific markets will grow from an estimated $950 million in 2001 to $17.5 billion in 2006. Asia-Pacific currently accounts for 87 percent of revenues, however by 2006 Datamonitor predicts the United States and Europe will have a 40 percent share of the market, compared to just 13 percent today.

Currently estimated at $105 million, Datamonitor predicts Europe’s wireless gaming market will grow to $4.2 billion in 2006. By comparison, in the United States it will grow from just $20 million today to $3 billion in 2006, as the operators increase their focus on gaming for revenue generation.

With an estimated 60 million wireless gamers, half of the worldwide total, Asia-Pacific is the wireless gaming capital of the globe. In Europe, 41 million currently play games on their mobile phones or PDAs compared to 22 million in the United States. By 2006, Europe will have more than 150 million wireless gamers with Germany, followed by Britain and Italy, dominating in terms of numbers. In the United States, Datamonitor estimates that the number of wireless gamers will grow to 124 million in 2006 as new devices and services bring accessible gaming entertainment to all.

“Our research shows that wireless users are not playing games simply to pass time, they choose to play a game over and above other activities. Wireless games are not simple time wasters but are actively engaging users with fun content,” said Peter Tyson, Datamonitor games analyst. “Furthermore, these gamers also frequently own a PC with Internet access. More than half of mobile gamers have Internet access and more than 80 percent of WAP phone owners use the Internet. Their game playing represents a choice of using their handsets for entertainment over devices arguably better suited for gameplay. Mobile interactive content is here to stay.”

Datamonitor also predicts that users will show an interest in downloading games for their wireless devices, based on the success of downloadable ringtones and graphics. By 2003, Datamonitor expects that downloading content for a small charge will prove to be a lucrative revenue stream. The familiar experience of downloading games and ease of use will see many users enjoying this wireless game experience. At the same time traditional developers will come to exploit this market, releasing for download wireless game versions of popular console and PC titles. The ability to then interconnect these devices as well as incorporate the wireless device’s portability into gameplay will be fully explored.

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