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Revenues from games software, worth USD17.7 billion in 2001, are predicted to rise by 22 percent to peak at USD21.6 billion in 2004.
A new report by Datamonitor reveals that the next three years will bring rapid growth to the electronic games market globally, spurred by the emergence of new home consoles.
The addition of multimedia features and the increasing power of the next-generation consoles, which will deliver near photo-realistic graphics to the public, will help broaden the penetration of home consoles. Datamonitor believes that console on-line gaming will also be a major factor in the growth.
The report "Global Electronic Games," predicts that Sony's PlayStation 2 (PS2) will dominate the home console market with Microsoft eventually taking second place over Nintendo. But in the handheld market, Nintendo's Game Boy Advance will hold a monopoly.
"There is no doubt that the PS2 will retain its leading position in the home console market over the next few years," said Adrian Drozd, Datamonitor games analyst. "By the end of 2005, there will be a global installed base of over 90 million for Sony's latest console, which will dwarf the Xbox total of less than 40 million."
The strength of Sony's PlayStation brand, united with a competitive price and a large selection of quality games, will maintain the lead of the PS2 in the market for the foreseeable future. And although the Xbox sales have been hit by the high price tag in Europe, this is expected to drop and the power of the console and its built-in Internet capabilities, will enable Microsoft to overtake Nintendo for the second place in the market. Nintendo's current lack of on-line gaming initiatives could also prove harmful for the long-term prospects of the console.
Although the US will remain the largest single market, thought to be worth USD7.4 billion in 2004, Asia Pacific, driven by Japan, will lead the industry in terms of revenues, with the research house predicting revenues of USD7.6 billion in 2004. The European market will be worth USD6.7 billion in 2004 with the UK accounting for 30 percent of total revenues, closely followed by Germany.
The market will start to decline in 2005 as consoles reach a maturity stage in terms of penetration and sales. However, Datamonitor expects that Sony and Microsoft will launch the successors of their current consoles by 2005, which will act to revitalise the market.
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