A new report from DFC Intelligence and Live Gamer predicts a growth in console market revenue of 29 percent, from 2013 to 2017.
The report suggests that over the next few years video games are expected to bring about a radical change in consumer patterns, as they connect their online devices to their TV sets, courtesy the launch of next gen consoles the PlayStation 4 and Xbox One in the coming months.
The most radical change will be the way consumers pay for games.“Game console systems have been able to go online for many years, but online play has been mostly free. This is expected to change significantly with this new generation of devices,” said David Cole, CEO of DFC Intelligence.
Revenue models ever so popular with mobile devices and PC games are expected to be applied to console systems in the coming years. According to findings in the report, in the period between 2014 to 2017, 36 percent of revenue for new game systems is primarily expected to come from digital delivery, while 61 percent of revenue sales generated from sales of traditionally packaged copies, not including revenue from additional digital content.
As in the case with PC and mobile gaming markets, developers have come up with new ways to attract consumers to pay for content. “This year’s report confirms that the addition of games-as-a-service to existing console business models will make titles more profitable than ever. Developers will have a host of monetization options from micro-transactions and subscription models to serialized DLC. For gamers, the addition of games-as-a-service means on-going delivery of fresh and exciting digital content on demand, no longer constrained by disc-based media,” said Andrew Schneider, co-founder and president of Live Gamer, Inc.
EX CEO of EA, John Ricitello also mentioned that the console market is expected to boom like never before, apart from pay to play MMO's, its a great time to be involved in any faction of the industry, even the high risk console market. "We've got a robust free-to-play market. We've got a robust mobile market. They're both going through the roof," Riccitiello said. "But at the same time, we are seeing the early indications of a console resurgence starting two to three weeks from now."
EX CEO of EA, John Ricitello
Despite the projected growth, the console market still has new challenges thrown its way. The report also suggests that smartphones and tablets are eroding the console user base. Findings in a survey about users' playing habits reveal that tablet gamers have reported, 'a pretty strong degradation on console'. On a global scale, PC game revenue is expected to be much higher than its consoles' counterparts. In the meantime, revenue from mobile games is expected to see growth, however more importantly it will take away valuable user base. To top it up, there are signs of a major war as to who controls the delivery of digital content to TV sets. The report analyses how companies like Amazon, Apple, Google, Samsung and Valve could fiddle with consoles.
“The battle for digital delivery in the living room could turn into a blood bath with no clear winners. The challenge for content providers will be how to best monetize their product for any given platform or market,” said Cole.