Video Game Reviews 4 You

Posted September 7, 2011 by James Brightman

Digital has been growing by leaps and bounds, thanks to social gaming on PC and games for smartphones and tablets. This isn't about to slow down and in fact will be one of the largest drivers of growth for the games industry worldwide, which DFC Intelligence forecasts will hit $81 billion in 2016.

The new report (purchasable here) says that the global games market (as of 2010) stands at $66 billion - this includes revenue from dedicated console hardware and software (both physical and online), dedicated portable hardware and software, PC games and games for mobile devices such as mobile phones, tablets, music players and other devices that can play games as a secondary feature.

Perhaps the most noteworthy point in the DFC forecast is that online game sales will exceed retail by 2013. Specifically, total worldwide sales of online games are expected to increase from $19.3 billion in 2010 to $37.9 billion by 2016. This includes revenue from PC online games, console online games and mobile online games including mobile phones and tablets.

"On a global basis it looks like retail delivery of physical software peaked in 2008. We expect a slow, steady decline for physical game sales, with a steady increase for online delivery of games and new business models such as subscriptions and virtual item sales," said DFC's David Cole.

While Nintendo's Wii U is expected to launch late next year, and DFC anticipates strong sales, it's not clear when Microsoft or Sony will launch new systems, and "this uncertainty over new game systems remains one of the biggest unknowns for the game industry," DFC noted.

"Systems like the Xbox 360 and PlayStation 3 are having their best sales ever five or six years into their lifecycle. Unfortunately this means Microsoft and Sony are in no hurry to launch new systems that would generate substantial consumer excitement and spending," says Cole. "The dedicated console business is still the major driver of industry growth, but we feel overall it has peaked with the current console systems."

As for the growing digital arena, DFC believes that these online options are additive and do not take away from consoles. "Games on Facebook and products like the iPad help expand the audience and the way products are delivered. The console business is firmly established and suffers mainly from the reluctance of hardware manufacturers to commit to expensive new products," added Cole.

"Overall the game industry is becoming more diversified and global as it continues to grow. This makes the industry challenging because it is hard to know where to place one's bets. At the same time, there are many niches of opportunity that didn’t exist in the past."

James Brightman has been covering the games industry since 2003 and has been an avid gamer ever since the days of Atari and Intellivision. He was previously the EIC of GameDaily Biz.