Research Roundup: Game Forecasts Get Very Bullish

Electronic Gaming Business, June 30, 2004

As for console gaming, especially in the U.S., we have to agree with Pachter, who similarly warns the industry not to rely on online gaming to produce a significant revenue stream for consoles for some time. MMOGs appeal to a niche, and the business models for publishers are unclear. And in one of the clearest statements we have heard from an analyst yet about the inherent limitations of this genre, he says "We believe that most people play video games for a form of mindless escape...to allow the player to remove himself from a social environment. The level of of social interaction in MMORPGs is inconsistent with the goal of mindless escape sought by most of the U.S. audience."

PC's Big Year, Steady Future

It comes as no surprise that all signs point to a robust year ahead for the PC platform with the release of Doom 3, Sims 2, and Half Life 2 driving both hardware and software interest. PwC is the only forecaster that seems to think the PC will continue to give up gamer mind and dollar share to consoles, although most agree that PC game publishing will be a risky environment that will be even more hit-driven than console. We think that unique gaming experience on the PC, and the attractiveness of the the Web and casual Pc gaming will keep this platform in play for the foreseeable future.

Gamers themselves seem to suggest as much. According to ePoll/GameDaily, 21% of gamers say they expect their PC software purchases to "increase a lot" in the next six months. In fact, clearly gamers are looking to the PC for highperformance experiences, because 24% say they intend to buy hardware upgrades to enhance their gaming experience. Remarkably, that high interest is consistent across all of the major age ranges, and even 19% of casual gamers say they are looking to upgrade for the sake of gaming.

This tells us several things. First, gamers still have faith in the PC as a gaming platform but may be looking to it now for particular types of gaming experiences. Technically adept first-person shooters seem to be driving the market (i.e. Far Cry and Painkiller). Companies that can hit this target may find the PC an even better hedge against sales lost during the hardware transition than handhelds, and this is especially true for companies that penetrate European and Asian markets where PCs still enjoy a hearty platform share. iDate projects even PC game sales through the transition period. As well, if 19% of casual gamers are considering PC upgrades to enhance their play, then this segment is becoming more self-conscious about gaming and may be ready for more sophisticated games along with marketing strategies that address them as players.

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