Skip to main content
If you click on a link and make a purchase we may receive a small commission. Read our editorial policy.

Online market will remain "untapped" until next hardware generation

Business models have been too slow to materalise, says report

Hardware manufacturers may have provided online-enabled consoles that users are actively engaging with, but content companies have been slow to exploit this online market, according to research by analyst firm Screen Digest.

There are several key reasons for the sluggish uptake, speculates the company. Publishers have been reticent to sabotage vitally important relationships with retailers, it believes, and have taken a cautious approach to online content, with releases generally "low cost and priced, under marketed and incremental to packaged sales".

And along with manufacturers and retailers, these key members of the traditional games value chain are acting as "bottlenecks" for the overall development of the online console market.

As a result, today's consoles will merely be "transitional devices" that will run out of time before their potential is fully exploited, it states.

"While the online console market is growing strongly and will provide welcome revenue in later years, today's consoles have been consigned to the important, but ultimately limited, online market role of 'transitional' devices as the industry only slowly makes its way to a more online-console orientated framework," said Piers Harding-Rolls, senior analyst and head of games at Screen Digest.

"There will be a substantial addressable online market to exploit towards the end of the cycle, but it is likely that this opportunity will remain significantly untapped and it won't be long before the industry will be forced once again to prepare itself for the next generation of hardware."

By the end of 2012, the report predicted global numbers of 'active online TV consoles' will have reached 79 million. While these console gamers will become incrementally more active in downloading game content, it said, these users will only spend an annual USD 1.2 billion on full game downloads by 2013 - which will account for just 11 per cent of the total current generation market.

Related topics

Kath Brice