Report Predicts $58.4 Billion Games Market

The global games industry will be worth $35.3 billion in 2005, 5.3% higher than in 2004, rising to $58.4 billion in 2007 according to new research from Informa Telecoms & Media.

The fifth edition of Informa's Dynamics of Games report has found that the console sector represents around half of games revenues worldwide. With the next generation consoles rolling out from November 2005, this will result in another peak -- the largest ever -- in 2007, when the market will be worth $58.4 billion.

According to Zenobia Talati, co-author of the report, Sony will be less dominant this time around. She said, "While we still expect the PS3 to lead the next wave of consoles, it will not be the one-horse race of the previous generation. The Xbox 360 will benefit from first-mover advantage and Nintendo has already revealed some interesting ideas for its Revolution concept."

Mobile games is the fastest growing games sector, and is expected to generate revenues of $2.6 billion in 2005. The broadband sector is another emerging market that is starting to impress. Report co-author Alastair Nash said: "The broadband sector is being assisted by fast growth from Xbox Live and, to a lesser extent, PS2 online. The launch of next generation machines will provide another boost for online games and help the market to settle on its most effective revenue model."

Adam Thomas, media research manager at Informa Telecoms & Media, added, "We are now talking about the games sector as a near-$60 billion business, which is an impressive number. But there are still some issues to be tackled. Broadband games are doing well, but will gain at the expense of the PC market which is in irreversible decline. The Interactive TV sector is still looking for a business model and there is also the issue of piracy to consider. We have calculated that the industry will lose $6.6 billion to piracy in 2005 and, if unchecked, that could rise to more than $9 billion in 2010."

Meanwhile, Yankee Group's US Portable Entertainment Forecast, released today, says the portable game business will be worth 2.3 billion by 2009. The company says game hand-held devices and phone hybrids will garner a near equal share of revenue by 2009

Informa: Global Games Market Value by Sector ($ million)

Console Hardware

2000: 4,791

2005: 3,894

2010: 5,771

Console Software

2000: 9,451

2005: 13,055

2010: 17,164

Handheld Hardware

2000: 1,945

2005: 3,855

2010: 1,715

Handheld Software

2000: 2,872

2005: 4,829

2010: 3,113

PC Software

2000: 5,077

2005: 4,313

2010: 2,955


2000: 70

2005: 1,944

2010: 6,352

Interactive TV

2000: 81

2005: 786

2010: 3,037


2000: 65

2005: 2,572

2010: 11,186


2000: 24,352

2005: 35,248

2010: 51,292

Software stats include sales and rental.

    Before it's here, it's on the Bloomberg Terminal.