Online console gaming subscriptions will be worth $650 million in the US by 2007, according to a new report from In-Stat/MDR.
The group says that there is some ‘real money’ to be made in the online gaming industry and that broadband service providers particularly would do well to act soon to make the most of this opportunity.
It is estimated that in 2002, around 9% of US-based internet traffic was generated from online gaming. “As the number of gamers climb, the amount of time they spend online will also grow. At the same time, as the performance of gaming silicon gets better, this will naturally create an environment where faster connectivity is needed,” says the report.
All three of the major console makers – Microsoft, Sony and Nintendo – have some kind of online gaming strategy. In-Stat says that Microsoft’s Xbox Live program is by far the boldest; it is currently the only one that mandates a yearly subscription.
The research says that whilst free online console players will out-number those paying through to 2004, in 2005 that trend is expected to be reversed as other console makers adopt the pay-to-play model.
The online console market will see a 9% average penetration rate by the end of 2007. Places with high broadband access, such as the US, Japan and Korea, are expected to show a higher than average penetration.
“The biggest risk to any company that is even marginally affected by online gaming is to dismiss it out of hand or put plans on the backburner until they think it matures. There are a lot of companies that are working very hard to grow this industry quickly so, odds are, they will help to move things along, faster than some expect,” says Eric Mantion, a senior analyst with In-Stat.
