Game Console Online Content set to boom

September 5, 2008 It’s a wireless world we are living in, and the next decade will see countless changes in the way we access, consume and pay for what we want. Further evidence of this arrived today in the form of Parks Associates’ forecast revenue streams for online content and services for Internet-connected game consoles. The research company expects the three game console manufacturers (Microsoft, Sony, and Nintendo) to be generating over US$8 billion in global revenue by 2013. The anticipated increase in revenue is expected to come from digital video distribution, downloadable games and content, virtual worlds and avatar-based microtransactions, multiplayer gaming services, and dynamic in-game advertising.

The report entitled “Connected Consoles: Games, Media, and Beyond” profiles new console-related capabilities, services, and business models, including online multiplayer gaming, virtual worlds, dynamic in-game advertising, and digital delivery. It also forecasts revenue growth and market share and examines the impact of game consoles on other industries.

“Broadband connectivity, now a common feature for game consoles, is a key enabler for new business models,” said Yuanzhe (Michael) Cai, Director of Broadband and Gaming, Parks Associates. “Among the different online revenue opportunities, digital video distribution and downloadable games and content are the most promising.”

All three console makers are dreaming up many innovative offerings to entice console households to get connected and spend more money, but the report reveals Microsoft currently dominates the online content and service market. Sony and Nintendo are gaining ground on Microsoft as they ramp up their base of connected customers and diversify their monetization methods.

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