IDC: Online Gaming Revenues Soar in 2011 : Next Generation - Interactive Entertainment Today, Video Game and Industry News
IDC: Online Gaming Revenues Soar in 2011
By Kris Graft Print | Send to a friend | Email the editor
An analyst with IDC expects worldwide online console revenue to shoot skyward from $981 million in 2007 to $10.5 billion by 2011.
ImageAnalyst Billy Pidgeon said new consoles with out-of-the-box connectivity and onboard storage would facilitate the enormous growth.
Currently, game companies are generating online revenue from subscription fees, paid downloadable content and in-game advertising.
Pidgeon, who is a program manager at IDC, said there is “huge potential” for online gaming revenues.
“Getting gamers online and enticing them to spend on content and services is crucial for vendors and publishers,” he said in a statement.
Virtually all major console game companies are vying for online revenues, whether it’s through paid subscriptions for services like Xbox Live, both new and classic downloadable games or deals with in-game ad providers.
IDC said console revenue will stand at 2.5 percent of total worldwide videogame market revenue. However, revenue in the online gaming sector is poised to expand to 18.6 percent of total market value, according to IDC’s latest report.
Other forecasts from IDC are as follows:
* Although subscription revenue for premium online services and games will grow from $476 million in 2007 to over $2.4 billion in 2011, its share of online console revenue will decline from 48.5% in 2007 (already down from a high of 86.5% in 2006) to 23.2% by 2011.
* Downloadable content (DLC) consisting of games and game-related items, which at $35 million in 2006 represented a 13.5% market share of online console revenue, will become connected consoles' primary revenue source in 2007, growing from $493 million in 2007 to $7.2 billion in 2011. In 2011, game-centric DLC will make up 68.6% of online revenue.
* Advertising revenue from sponsored services, in-game ads, and product placement in connected consoles will reach $12 million in 2007, posting the first significant online console ad spend. Advertising revenue will grow to $858 million in 2011, with an 8.2% market share of online revenue.
The data comes from the IDC report, Worldwide Connected Console 2007-2011 Forecast: Downloads for Dollars.
A June 2006 report from research firm DFC Intelligence pegged online gaming revenues--including PC gaming--to reach $13 billion by 2011.
