DFC Intelligence Forecasts Global Video Game Software Industry to Reach $100B in 2019

New DFC Intelligence forecasts for the game industry are being released and indicate that the industry will grow significantly over the next five years.

New DFC Intelligence forecasts for the game industry are being released and indicate that the industry will grow significantly over the next five years.A series of new reports from DFC Intelligence examine growth prospects for the worldwide video game software industry. The reports forecast that the global video game industry will reach $100 billion by 2019. However, this revenue is likely to be extremely fragmented among many market segments. This includes revenue from PC games, console games and mobile games but does not include hardware spending.

The new console game systems are expected to pass over 200 million in units by 2019 with the Sony PlayStation 4 leading the way. The challenge is that the Xbox One and Nintendo Wii U will underperform their predecessors and by 2019 all the major game systems are expected to be in decline.

The main trend that has been occurring for years has been a movement to digital revenue as opposed to revenue from sales of physical products. Products that are delivered digitally to mobile, PC and console devices will account for 85% of revenue by 2019 with the remaining 15% of revenue sales of physical media for dedicated portable and console game systems. "A major challenge with digital remains distribution," says DFC analyst David Cole. "Retailers are expected to remain a major force in the digital age as long as they can maintain their relationships with consumers."

A major issue discussed in the reports are the challenges presented by free-to-play/freemium models. According to DFC, with a handful of exceptions, outside of Asia freemium business models are not ideal for core consumers. "Unfortunately in the mobile game space, consumers have balked at paying any money upfront. Most games were never designed for a freemium model and therefore never have a chance," said Cole. "The good news is that AAA console and PC games can still command a premium price at launch with the ability to add additional digital content as a secondary source of revenue."

According to Cole, the core gamer is going to be the key driver of industry growth. "The number of gamers willing to line up at day one and pay top dollar to get the latest hit continues to grow substantially. These are the gamers driving industry growth."

The new reports are available individually or as part of a bundle. They include:

Worldwide Video Game Market Forecasts: This report contains complete hardware and software forecasts for mobile, console and PC games, including console systems, dedicated portable devices, iOS and Android devices.

Video Game Consoles in the Connected Home: This report analyzes the prospects for the game console systems and forecasts how revenue will be split between digital and physical sales.

Freemium Client PC Game Business Models: This report is a detailed analysis of the revenue and cost structure from high-end PC games that use a freemium business model. The focus is on products targeted to markets outside of Asia.

PC Game Market Overview: This report includes a detailed look at the PC Game market including Asia with analysis of individual countries and regions and complete five-year forecasts.

DFC Intelligence (http://www.dfcint.com) is a strategic market research and consulting firm focused on interactive entertainment and the emerging video game, online game, interactive entertainment and portable game markets. Since 1995, DFC has published in-depth strategic market reports and subscription-based research services. DFC research is used by more than 300 leading companies in over 30 countries worldwide.