Advanced Game Platforms Drive Sales of Home Market
NEW YORK (Feb. 9) BUSINESS WIRE - Feb. 9, 1998 - Worldwide sales of
hardware and software for the home interactive entertainment industry
surpassed $23 billion in 1997, with the United States representing
nearly 40 percent of the total market, according to Access Media
International (AMI), a New York-based analyst firm.  Propelled by the
introduction of more powerful 3D technology that has increased realism
in game play and by the promise of online play, the home interactive
entertainment market is growing faster in the United States than the
economy and will exceed $18 billion in sales here within five years.
In the most comprehensive analysis of hardware, software and
peripherals ever undertaken, AMI found that:
The dedicated console market, comprised of the Sony PlayStation, Sega
Saturn and Nintendo 64 platforms, and their software titles and
accessories, is slightly larger than the dedicated game PC market, on
a dollar basis worldwide. In the latter category, no manufacturer
dominates.  Global advanced interactive (GamePC and 32 bit and above)
software accounts for approximately $8 billion, or 35 percent, of the
in-house interactive entertainment market.  In the U.S., software
accounts for over $3.5 billion, or 34 percent, in retail sales volume.
O    The dedicated console software market is 6 times larger than the
     PC software market on a global basis, but only 2.5 times larger
     in North America.
O    The 1997 worldwide game controllers market accounted for just
     under 5 percent of the total market or close to $1 billion and
     the United States accounts for close to 50 percent.
O    Despite early disappointments, networked gaming has a bright
     future.  By the year 2002, online game revenues could approach $1
     billion in the United States alone.
Walter Miao, AMI analyst and principal author for the study, predicts
steady growth for all segments of the home interactive entertainment
market, with graphics capabilities the decisive factor in any coming
shake out.   "The dedicated console manufacturers, especially Sony,
have evolved their platforms to a point where they provide 3D realism
that competes with the more powerful PCs and yet offer a box at a mass
market price," Miao pointed out. "Console products are also moving
quickly to develop next generation platforms that will integrate with
the Internet."
Miao expects to see 128-bit console systems as early as 1999,
depending largely on moves by Sega, which is widely rumored to be
developing a new system which clearly has been delayed but might still
be on the horizon for late 1998 or 1999.  Although sales of
interactive home entertainment software have grown steadily, no one
console manufacturer or publisher dominates the hardware segment,
according to AMI's study.  While three players -- Nintendo, Sega and
Sony have shared the console market, no brand of PC system is widely
known for gaming.
In software, the market is even further splintered.  Of the Top 20
publishers of home entertainment software worldwide, for instance, the
largest company, Electronic Arts, represented less than 12 percent of
the interactive entertainment/edutainment market in 1996. Microsoft,
the second largest company, had 10.9 percent.  Only one company
outside of the United States is represented in the Top 20, Infogrames,
of Lyon, France.
Controller market revenues are climbing.  AMI puts the retail market
for game controllers at $155 million in 1996.  As might be expected,
almost 70 percent of that revenue came from after market sales for the
PC, which does not ship with a game controller.  The strongest growth
category for both the PC and the console was game pad/data gloves,
which represented about 24 percent of total controller revenues.
While online games have not yet become a significant portion of the
market -- only 4.3 percent of total revenues in 1996 -- Miao feels
that this market will explode over the next five years, as hardware
and software issues, such as latency, or slow on-screen reaction to
another player's moves, are solved.
From:  Silicon Times Report / February 13, 1998 / No.1406
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