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Game revenues to grow to $70 billion by 2017 - DFC

Game revenues to grow to $70 billion by 2017 - DFC

Fri 08 Jun 2012 1:36am GMT / 9:36pm EDT / 6:36pm PDT
Business

Core gamers still reluctant to embrace social games says research firm

DFC Intelligence has predicted that global revenue from video game software will grow from $52 billion in 2011 to $70 billion in 2017. This growth of revenue is split three ways between PCs with 39 percent, game console systems with 36 percent, and mobile devices with 25 percent.

"While the game industry is expanding on all fronts with new demographic groups playing games on a regular basis, the core consumer still remains male, age 12 to 30," says David Cole, CEO of DFC Intelligence. "In every segment, the key growth factor is improving access and monetization capabilities to that core demographic. Digital distribution, already widely accepted among core gamers globally, is clearly broadening access to products and driving much of the industry growth."

DFC worked with Xfire in order to quantify the success of new PC products.  In the past year, the PC game market in North America and Europe has seen record usage of products like League of Legends, Diablo III and Minecraft; with no retail presence for two of those three, the games have consistently seen as many as one million active users a day.

"DFC is the ideal partner to help Xfire analyze gameplay data from our user base of more than 21 million gamers in North America, Europe and Asia," said Malcolm CasSelle, CEO, Xfire. "Xfire has a deep insight into game trends because our app natively tracks the number of players - and hours played - for each title, by country. Xfire tracks the growth trajectory of new titles at launch, including which titles keep a share of gamers' time and which games get dropped in favor of newer titles."

DFC also partnered with monetization firm Live Gamer to better know the habits of various free-to-play products. As it turns out, purchase behavior of core consumers of an F2P game is much like it is for a traditional boxed retail product.

"Gamers tend to make purchases several times a year in bulk sums of around $20 to $50," added Cole. "A successful game should count on an average paying consumer spending $75 a year for two years."

Furthermore, DFC found that while core gamers are embracing mobile devices in growing numbers, they are not satisfied with the games in social networks like Facebook. DFC forecasts that browser and social network games will exceed $8 billion in revenue by 2017, dependent on having stronger appeal to core gamers.

"The bottom line is core gamers spend money on products they like and right now the game offerings on sites like Facebook are simply not appealing to that demographic," said Cole.

5 Comments

Bruce Everiss Marketing Consultant

1,692 594 0.4
Angry Birds has over a billion downloads. So the new reality is that playing games is close to ubiquitous, like listening to the radio is. So targeting a narrow demographic too much is bad for the industry and bad for the public who are our customers.
The big revolution, even bigger than the platform revolution, is the business model revolution. Monetisation of IP has changed radically and quickly. It will change further still. This will have a profound effect on the gross revenues of the industry.

Posted:2 years ago

#1

Morville O'Driscoll Blogger & Critic

1,593 1,448 0.9
So targeting a narrow demographic too much is bad for the industry and bad for the public who are our customers.
Well, yes, this is true. But this is true of any mainstream medium. You've got to have the Hollywood blockbusters alongside the Arthouse films; The Avengers as well as Rashomon. And, honestly, I don't see the issue with it in a gaming sense - Core gamers don't play Facebook games because the games are too shallow. With more complexity comes more Core gamers, but also (theoretically) more Casuals who get pulled into the newer, more complex games. So, it should all work out, in the end.

Posted:2 years ago

#2

Keldon Alleyne Handheld Developer, Avasopht Ltd

450 423 0.9
So targeting a narrow demographic too much is bad for the industry and bad for the public who are our customers.
How narrow is this demographic (in numbers)? How does having core gamers serviced disservice the larger demographic?

And how does a billion Angry Birds and playing games being ubiquitous imply the proposed affect on the industry and the public?

What is the threshold to which the market size of core games is not sufficient enough for it to be served on a commercial basis?

With all the changes that are and will happen it would be naive to presume such difficulty in reaching and serving core gamers, or to which that capacity will be. What do you predict the market of core games to be in 5 years time? $20bn, less than $5bn? What exactly?

Posted:2 years ago

#3

Bruce Everiss Marketing Consultant

1,692 594 0.4
@Keldon Alleyne

I think that the realities of the market are that "core" is outdated terminology. People tend to mix and match their entertainment. I am sure that plenty of CoD players also play Angry Birds.

Posted:2 years ago

#4

Keldon Alleyne Handheld Developer, Avasopht Ltd

450 423 0.9
I was of course referring to the "narrow demographic", call them "core" or whatever, could you quantify your statements a little?

I do appreciate the insight and would like to see them backed up by at least a little bit of data. How did you arrive from that first premise of the number of Angry Birds downloads to your conclusion?

The "realities" of anything on the scale of an industry are only ever known to those outside a position of control from such a narrow perspective that opinions and feelings are of little substance. The logical steps take various factors for granted, which is the reason for my questions. I do understand that some figures may be trade secret, but should any predictions or opinions be said that will not be honored with a decent explanation or evidence when asked?

Posted:2 years ago

#5

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