The global video games market

driving revenue from online strategies (Strategy Focus)

Publication Date	January 2007
Publisher	Datamonitor
Product Type	Report
Pages	13
ISBN Number	not applicable
Product Code	DAT04324

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Summary

Introduction

Games console manufactures are seeking to generate an increased proportion of their revenues from online services.

Scope

Provides analysis of current players in the video game console market and their respective business strategies.
Addresses key pricing points of the current manufacturers and highlights current online strategies.
Addresses new ways manufacturers are exploiting opportunities to reach consumers.
Outlines current industry activity in the sector as players look to alternative revenue streams.

Highlights

Consumers are confronted with a plethora of entertainment options and the games sector is hard pressed to remain innovative. Manufacturers are pushing online services to help retain customers and diversify their content offerings.

Next-generation consoles from Microsoft, Nintendo and Sony are all battling for the living room through the creation of dynamic online products. Microsoft currently holds a strong lead with regards to online services although competition is pushing to usurp its position.

All of the major console manufacturers are looking to exploit the 'long-tail' with the promotion of digital distribution models. Datamonitor considers that the ability to offer comprehensive content portfolio will significantly effect the uptake of next-generation consoles.

Reasons to Purchase

Understand the current competitive environment facing the video game console market with regards to online services.
Gain insight into each of the current online offerings by the major market players.
Address current and future trends in the online market while establishing recent industry action helping to facilitate this transition.

Content

Catalyst
Summary
Methodology
- AnaLYSIS
- Market players fight to remain competitive
- Players battle for consumers 'playtime' with alternative entertainment sources
- Understanding audiences is one of the biggest challenges facing the sector
- New strategies come to light in the video game hardware and software market
- Nintendo retains a price advantage
- Sony and Microsoft battle for the living room
- Nintendo aims to include the whole family through innovative gameplay
- Manufacturers look to online gaming to provide new opportunities to reach consumers
- Online gaming has traditionally been dominated by PC-based services
- Sony and Nintendo look to tackle Microsoft's online dominance
- PlayStation Network offers 'core' services for free
- Wii Channels and Wii Connect24 create an 'open' online system
- Nintendo's WiFi Connection offers free roaming gaming
- Xbox Live continues to hold a strong position through it two-tired system
- Xbox Live Arcade offers causal gaming to the video game console audience
- All of the major players are placing a strong emphasis on online services
- PS3 set to have the largest user base for online services
- Publishers aim to exploit the 'long-tail' through digital distribution
- Games companies explore alternative revenue generation strategies
- Online gaming provides a perfect opportunity for advertising
- Micro payment models are seen as a possible opportunity to increase revenue
- Industry activity highlights the shift towards new revenue generation tactics in the sector
- Acquisitions consolidate the once fragmented publishing industry
- Big firms begin to take in-game advertising seriously
Appendix
- Definitions
Further reading
- Ask the analyst
List of Figures
- Figure 1: Console pricing strategies, 1985 - 2006
- Figure 2: Comparison of online services for next-generation consoles
- Figure 3: Online users for next-generation consoles
- Figure 4: Exploiting the long-tail: the push for digital distribution