Sales of Game Consoles Set to Fall, Amount of Online Services Subscribers to Raise – Analysts

Microsoft Xbox Live to Generate $1 Annual Billion Revenue by 2013

by Anton Shilov
04/10/2009 | 07:42 AM

Shipments of video game consoles are increasing these days since consumers consider them as inexpensive entertainment. However, research company In-Stat believes that in mid-term future sales of game consoles will collapse, but the number of online video game services-related subscribers will increase.

 

“Unit sales of game console will decline moving into 2010, as a result of both the weak economy and a peak in each vendor’s video game console lifecycle. The key vendors, including Microsoft, Sony and Nintendo are staking out their online strategy to generate incremental revenue and promote brand loyalty,” said Stephanie Ethier, an In-Stat analyst.

According to In-Stat, growth in online gaming subscriptions is expected to be strong due to a sizable console installed base and growing consumer awareness of online gaming. Console and handheld subscriber growth combined will grow a projected 20.4% between 2005 and 2013.

Each of the three key vendors is positioned to generate hundreds of millions of dollars in annual online gaming revenue from online service subscriptions, download revenue and/or online advertising, the research company claims. But, Microsoft’s Xbox Live service will clearly lead, with projected revenue of over $1 billion in revenue annually by 2013. It is interesting to note that Nintendo, who has the most successful video game console of this generation still has the least advanced online service.

Worldwide broadband subscriptions will reach 562 million in 2009. The combination of broadband, installed home networks, and pervasive Wi-Fi in gaming devices, is fueling online gaming subscriber growth.

In 2008, total video game console unit shipments reached 88 million worldwide, up 7% from worldwide unit shipments in 2007, according to In-Stat.