Games are not what they use to be. You don’t have to blow on the carts anymore. If you pull out your friends controller the game will pause. Come to think of it your friend does not even have to be in the same country with you anymore to play along with them. Games have truly come a long way. As far as they have come the stigma remains that they are for kids only or losers. Well take note main media. Call of Duty holds the record for the biggest day in entertainment. Not the movies. What’s more This year alone games are expected to exceed $74 billion. That is Billion with a B.
That is what new research from Gartner said will be spent on global gaming. That is up 10.4% from 2010. What that is not enough? Well video games are to reach $112 billion by 2015. Casual gaming can be thanked for expanding games into other markets. It’s not just the systems anymore as more and more of them are holding on to long life cycles. Software sales are expected to reach $44.7 billion in 2011. Gartner research director Fabrizio Biscotti said “This large market size means that many consumers embrace gaming as a core piece of their entertainment budget and will continue to play as long as game publishers deliver compelling and fun games,”
Gartner PRESS RELEASE:
Gaming Software Spending Dominates but Online Gaming Growing Fastest Over the Next Five Years
Egham, UK, July 5, 2011—
The gaming ecosystem is undergoing major technology and business model transitions that will last beyond 2015. Gartner, Inc. estimates that worldwide spending on the gaming ecosystem* will exceed $74 billion in 2011, up 10.4 percent from 2010 spending of $67 billion. By 2015, spending will reach $112 billion.
Overall, Gartner estimates that the gaming software component will represent $44.7 billion in 2011, and it will continue to dominate the overall gaming market in the next five years as it absorbs almost two-thirds of consumers’ gaming budgets.
“This large market size means that many consumers embrace gaming as a core piece of their entertainment budget and will continue to play as long as game publishers deliver compelling and fun games,” said Fabrizio Biscotti, research director at Gartner.
In 2011, the gaming software spending will be followed at a distance by gaming hardware and online gaming, reaching $17.8 billion and $11.9 billion, respectively (see Table 1).
Table 1: Total Gaming Market Spending, 2010-2015 (Millions of Dollars)
2011 2013 2015 Gaming Hardware 17,797 24,621 27,354 Gaming Software 44,730 51,129 56,512 Online Gaming 11,899 21,453 28,298 Total 74,426 97,204 112,163
Source: Gartner (June 2011)
Within the gaming software market, mobile gaming will experience the largest growth opportunity with its share growing from 15 percent in 2010 to 20 percent in 2015.
“As the popularity of smartphones and tablets continues to expand, gaming will remain a key component in the use of these devices. Although they are never used primarily for gaming, mobile games are the most downloaded application category across most application stores,” said Tuong Nguyen, principal research analyst at Gartner. “For this reason, mobile gaming will continue to thrive as more consumers expand their use of new and innovative portable connected devices.”
The segment that will drive the largest revenue will come from video game consoles (hardware and software). In 2010, it generated more than two-thirds of the gaming ecosystem revenue, and Gartner predicts revenue to grow 4 percent in 2011.
Over the next five years, gaming hardware’s market share will remain constant while software spending will lose share to online-gaming spending, the fastest-growing segment. Gartner estimates consumer spending on global online gaming (subscriptions and microtransactions) will show a compound annual growth rate of 27 percent through 2015, with consumer spending on subscription fees slightly declining while spending on virtual goods will grow exponentially.
“We find that subscription fees are giving way to ‘freemium’ models, in which the game is provided for free to gamers but is monetized through advertising (both in-game advertising and display advertising) and in-game microtransactions, such as the sale of value-added services or virtual-good purchases,” said Brian Blau, research director at Gartner. “This trend is prevailing given the rise of social gaming, in which online gaming is connected to social networking sites and social networking platforms.”
“Users have become multichannel-oriented by choice and expect vendors to continue to deliver quality content and experiences by extending their gaming possibilities across multiple platforms,” said Mr. Blau. “If today’s mobile technology does not evolve quickly enough, the gaming industry is set to see the rate of innovation severely decline. Alternatively, it will provide opportunities in technology and content genres that we can’t foresee today.”
Additional information is available in the Gartner report “Market Trends: Gaming Ecosystem, 2011″ at http://www.gartner.com/resId=1724014.