Broadening the Base: The New Audiences for Gaming

Electronic Gaming Business, Jan 14, 2004

Gaming is in the same boat as most consumer electronics. Young, white males remain the sweet spot for hardware marketers, and so the industry challenge is moving outside of the early adopter, tech-savvy, high spenders and into a broader ethnic, age and gender mix. According to the Consumer Electronic Association's latest research, women, African-Americans and Hispanics represent the growth opportunities for gaming as the current generation of consoles move toward mid-life.

The CEA's projections about growth in the gaming industry are a bit more conservative than some on the hardware side and more optimistic than others on the software side (see charts). The research seems to have pegged 2002 as the peak year for this generation of console hardware, with a noticeable revenue decline next year.

As a consumer electronics device, gaming consoles enjoy excellent penetration rates of 43% of households in the 1,000 consumers CES polled. That puts game devices just behind cable TV service and ahead of premium cable among CE units.

If publishers can't grab women with game titles, then it is their own damn fault because women certainly have the necessary hardware at hand. In fact, surprisingly enough, console penetration is greater among women 18-34 (57%) and 35-54 (55%) than the average. As well, game consoles are among the fastest growing technologies for women, with 9% saying they will buy a unit in the next 12 months, compared to 13% of men. No doubt, much of this ownership reflects moms with kids, but the fact that women have a console at hand and are well aware of the technology is significant. CES analysts say that women generally look for reliability and value in their CE devices, which also might give game publishers a target for their wares. Marketers might focus on value-driven compilation titles as well as titles with some longevity (RPGs, replayable puzzlers, etc.) for this segment.

Media-Deep African-Americans

No population segment has as deep and rich a relationship with media forms as African-Americans, according to CES numbers, and this translates into a much higher willingness to engage and tinker with new technologies. One reason for this may be that African-Americans generally credit many media forms with giving a bigger pay-off. For instance, while 65% of the overall population told CES pollsters that electronic entertainment, notably TV and games, "help you relieve stress," 76% of African-Americans agreed with that idea. This sector feels much more strongly than average (85% vs. 69%) that electronic media "create opportunities for families and friends to spend time together."

This latter point about media being seen as a communal catalyst for African-Americans suggests that game companies may be typecasting these audiences too readily by targeting them only with "urban" titles (i.e. hip hop soundtracks and "street" sports). In fact, game marketers might find that family and multiplayer games of all sorts are welcomed especially by African-American buyers who are better able to see the social potential of gaming.

The African-American market is extremely promising for software publishers, because the hardware penetration rate in these households (50%) is noticeably higher than penetration in the overall population (43%). PC penetration for this population is noticeably lower than average, but across all game delivery devices the growth potential here is superb, an excellent population on which to focus both development and marketing efforts. Among African-American respondents, 40% said they intended to buy a cell phone in the next year, while 25% intended to buy a PC and 23% plan to get a game console (and that with already high penetration rates).

The gaming industry might take some cues from the more experienced CE industry, which is actively pursuing women, African-Americans and Hispanics as key growth markets that require careful research in order to enter with the right products, price points and marketing approaches. Much of the industryoriented material at CES reiterated this theme at every turn and supplied talking points for developing products and selling to these segments. The game industry, too, pays constant lip service to "expanding the base," but when will we see this same kind of organized attempt to marshal the industry troops (let alone the press) in that direction at E3.

Electronic Gaming Hardware Sales Projections
1999          $2.25 billion
2000          $2.70 billion
2001          $3.25 billion
2002          $3.75 billion
2003 (est)    $3.188 billion
2004 (proj.)  $2.70 billion

Electronic Gaming Software Sales Projections
1999          $5.10 billion
2000          $5.85 billion
2001          $6.25 billion
2002          $7.375 billion
2003 (est.)   $7.744 billion
2004 (proj.)  $8.131 billion
Source: CEA

Entertainment Technology Ownership
                   All Adults  All Men  All Women
Color TV (27-inch
screen or larger)  66%         70%      62%
DVD Player         62%         69%      56%
Cable TV Service   61%         62%      59%
Electronic Game
System             43%         46%      41%
Premium Cable      24%         27%      20%
Digital Cable      22%         23%      21%
Satellite TV       22%         24%      20%
HDTV               18%         19%      18%
Projection TV      9%          13%      6%
Source: CES