Internet Features Drive Video Game Sales

Enhanced features, particularly those related to the Internet, will be critical to the video game market’s future growth, according to research by the Yankee Group.

In a survey of US households, the Yankee Group found that 7 percent of respondents said they were very or somewhat likely to purchase a video game console within the next six months. But when the same consumers were given some key facts about the new generation of game machines, which come equipped with modems enabling Web access and email, allow multiple players to compete over the Internet, and cost about $199, the number of likely purchasers nearly doubled, rising to 12 percent. With the current base of US households estimated at 100 million, this figure translates into a potential marketplace of 12 million buyers.

“When consumers think of video game consoles, they still tend to think of dedicated systems that only play games,” said Yankee Group senior analyst Michael Goodman. “But the new generation of players from Sega, Sony, and Nintendo offer a wider range of entertainment and online features. By incorporating a modem, these systems have evolved into Internet appliances that allow users to surf the Web, use email, and play games against other users over the Internet. As consumers start to understand what these systems can actually do, their interest in them increases substantially.”

The survey found that among consumers who were likely to purchase a new game system, 47 percent said they were interested in using it to surf the Internet. This was followed by using email (45 percent), and playing networked games over the Internet (42 percent).

Percent Likely or Very Likely
to Purchase a Video Game System
No description of system
features or price
Total Current
Owners
Non-Owners
7% 14% 3%
Description of system
features or $199 price
12% 20% 7%
Source: The Yankee Group

“Realistically, all of these homes won’t purchase a new game system within the next six months, but even if a quarter do, it translates into three million units sold,” Goodman said. “The challenge for Sega, whose Dreamcast player will be the only new system available in the United States for the next year, will be to market effectively to this expanded audience of potential buyers.”

Other key findings from the study include:

  • 62 percent of video-game owning households also have a home computer
  • On average, video game owning households (including both video game consoles and PCs as a game platform) spend more than $200 per year on video games
  • Adults are the primary video game user in 40 percent of video game households
  • Adults who play video games spend an average of 3 hours and 17 minutes playing video games each week.

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