In-Stat/MDR Reports Sony Dominates Video Game Console Market While Nintendo and Microsoft Battle for Second Place

Business Wire, Oct 29, 2002

Business Editors & High-Tech Writers

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Oct. 29, 2002

With next generation consoles from Sony, Nintendo and Microsoft now available in North America, Japan and Europe, the video game console market reached 31.8 million units shipped and revenues of nearly $7.4 billion in 2001, according to In-Stat/MDR (http://www.instat.com). The high-tech market research firm reports that Sony is, and will remain the leader in this space, shipping its 40 millionth PlayStation 2 on Sept. 19, 2002.

"The video game console business is increasingly big business," said Brian O'Rourke, a senior analyst with In-Stat/MDR. "The year 2001 saw total video game revenue surpass movie box office receipts in the US for the second consecutive year, and shipments are expected to increase substantially in 2002." The introduction of plans for online gaming by all three console manufacturers has the potential to transform the market going forward. Sony and Nintendo are both pursuing an open online system, where the online game developer is responsible for administering the network infrastructure, and the consumer plays the online game over his own ISP, through a dial-up or broadband modem. Microsoft, on the other hand, has Xbox Live, which will be a closed service run entirely by Microsoft. Microsoft will run the servers and do all subscriber billing.

In-Stat/MDR also found that:

-- A recent survey of consumers revealed that nearly half of the respondents expressed interest in online console gaming. When asked what they would be willing to pay per month for online console gaming, well over half of the positive respondents were willing to pay $5 or more per month, while over one-third were willing to pay $10 or more per month.

-- A solid 25% of the survey respondents watch movies on their PS2, with 6% watching them on Xbox. Overall, nearly one-third watch movies on their video game consoles.

-- By early 2003, Nintendo should have released most of its franchise software titles, such as Mario and Zelda. Since Nintendo has always been driven by such franchise software, this holiday season should go a long way to determining the overall success of the GameCube.

The report, "Video Game Consoles: Sony Dominates While Nintendo and Microsoft Battle for Second Place" (#IN020041ME), includes a five-year forecast for each game console, in terms of both units and revenue, broken down by region. Quarterly shipment reviews and forecasts for each next-generation console in 2001 and 2002 are provided, also broken down by region. There is also a forecast for online console gaming subscribers through 2006. The three participants in this market, Sony, Nintendo and Microsoft, are profiled in depth in four areas: console business, online plans, marketing strategies, and shipment analysis. The report also includes results from In-Stat/MDR's annual Residential Technology Survey, which includes the responses of 961 random adult consumers on such issues as game consoles owned, likelihood to buy a console in the next year, interest in online console gaming and willingness to pay, and interest in watching movies on their consoles. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/cat-me.htm or contact Erin McKeighan; emckeighan@reedbusiness.com or 480/609-4551. The report is priced at $3,295.

About In-Stat/MDR

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end users.

In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (www.reedelsevier.com), a world-leading publisher and information provider. With over 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to-business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.