Worldwide video game and interactive entertainment to top $44 billion

The worldwide video game and interactive entertainment industry is expected to grow from about $29 billion in 2005 to as much as $44 billion in 2011, according to DFC Intelligence. This forecast includes revenue from video game hardware and software, dedicated portable system hardware and software, PC games, and online PC and console games.

DFC forecasts the market using three different scenarios for each of the new video game systems, the Sony PlayStation 3, the Nintendo Wii and the Microsoft Xbox 360.  Overall market growth is about the same under all scenarios.  However, under each scenario individual platforms have very different results. 

At its peak PlayStation 2 software alone accounted for about 30% of worldwide interactive entertainment revenue.  By 2011 all console software combined will only account for about a third of worldwide sales, says DFC Intelligence. 

DFC Intelligence also estimated the worldwide online game market to grow from $3.4 billion in 2005 to over $13 billion in 2011.  This increase is being driven by the increase in broadband households, higher PC penetration and more connected console video game systems. During this time period North America is expected to challenge current market leader Asia as the leading region for online games. 

Despite the strong growth, the leading online game category is expected to remain high-end massively multiplayer online games (MMOGs). The Xbox Live online game service is a central part of the Microsoft Xbox 360, the Sony PlayStation 3 is expected to have an increased focus on online games and the Nintendo Wii will feature the online enabled Virtual Console concept that will allow for some significant online digital distribution.

Major markets like South Korea, China, Japan and the U.S. are all now able to support individual games that do over $100 million a year in just one country.  The first big international success in online games, World of Warcraft, from Vivendi Universal’s Blizzard Entertainment, will do over $100 million in each of several different markets in its first year alone. 

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