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| GartnerG2 Says the Launch of Next-Generation Consoles Begins the Evolution of Online Gaming |
| Microsoft, Nintendo and Sony Positioning to Compete for Online Gaming Market which is Projected to be a $2.3 Billion Industry in the United States by 2005 |
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San Jose, Calif., November 15, 2001 - With the launch of next-generation consoles, online console gaming will evolve in the United States over the next five years, but this market won't begin to show significant revenue for 12 to 18 months, according to GartnerG2, a research unit of Gartner, Inc. (NYSE: IT and ITB).
"Online console gaming revenue in the United States is projected to grow from $138 million in 2002 to $2.3 billion in 2005," said Mike Cruz, senior analyst for GartnerG2. "Although the average amount spent per online console household will drop from $167 in 2003 to $157 in 2005, the number of users will dramatically increase. Online console gaming will be a bonus feature of games in 2002, but it will become an assumed feature in 2005." One of the more popular gifts this holiday season will be one of the next-generation consoles. The three systems to choose from will be the Microsoft Xbox, the Nintendo GameCube and the Sony Playstation 2 (PS2). Each of these consoles holds the promise of online gaming for new generations of gamers. "Internet broadband penetration in U.S. households continues to rise, and that broadband connection combined with these next-generation consoles will enable new revenue models not only for gaming services but also other services, such as music subscriptions," said P.J. McNealy, senior analyst for GartnerG2. "This vision of additional services beyond gaming will appeal not only to the traditional hard-core gamer, but also to new users who previously had little interest in consoles or online gaming. GartnerG2 defines online console gaming revenue as proceeds from subscriptions for online console gaming using a broadband connection. It does not include any revenue from PC gaming or any ancillary services enabled via the console (such as music subscriptions). These next-generation consoles are positioned as not just a game console, but rather a console that has multiple entertainment capabilities. The PS2 and Xbox allow DVD playback. "This multifunctional capability is especially attractive in markets outside of the United States, such as Japan. In the United States, it's considered a bonus, but not a crucial factor," said McNealy. "However, it makes the consoles more attractive to the household buyer because the new consoles, while expensive, aren't just for the gamer in the house." Sony has touted PS2 not just as a gaming device, but as a machine that will enable digital music subscription services, streaming and downloaded digital movie services, and communications services such as e-mail and instant messaging via a broadband adapter. Microsoft has touted Xbox as a gaming device, and it has resisted discussing other services while it focuses on its first entry into the game console market. "The bottom line is that with a hard drive and a broadband connection, the next-generation consoles will have the capability of storage for non-gaming services," McNealy said. "However, these services are still a few years away." Broadband access will be the key to online gaming succeeding. While household broadband penetration rates are increasing in the United States, the broadband access point is usually located near the PC, not the television. "Until wireless broadband access is widely available and reasonably priced, there will be some tripping over wires in households as broadband connections run from the PC to the TV area and into the game console," McNealy said. Additional information is available in the GartnerG2 report "U.S. Online Console Gaming: Xbox Starts the Slow March Uphill." This report examines the opportunities for hardware vendors, media marketers and software developers in online gaming. GartnerG2 is a new research service from Gartner that helps business strategists guide and grow their businesses. For more information, visit www.gartnerg2.com. Gartner, Inc. is a research and advisory firm that helps more than 11,000 clients understand technology and drive business growth. Gartner's divisions consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner, Inc. is headquartered in Stamford, Connecticut, and consists of 4,300 associates, including 1,200 research analysts and consultants in more than 90 locations worldwide. The company achieved fiscal 2001 revenue of $952 million. For more information, visit www.gartner.com. |
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Contact: Andy Silver Middleberg Euro RSCG 212-699-2589 andrews@middleberg.com |
Contact: Tom McCall Gartner, Inc. 408-468-8312 tom.mccall@gartner.com |
