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Wednesday, January 09, 2013
IDC Anticipates a Video Game Console Rebound As New Platforms Arrive

International Data Corporation (IDC) today published a new forecast on the video game console market. The study details demand for Microsoft, Nintendo, and Sony game console hardware and associated physical game software in four global regions through 2016.

"The console ecosystem is in a state of flux since these platforms need to support an ever-growing array of non-gaming features and services at the same time that game distribution and monetization is moving in a digital direction," said Lewis Ward, research manager of IDC's Gaming service. "At the same time, it doesn't appear that alternative platforms - set-top boxes from cable companies, Web-connected smart TVs, and so on - are positioned to materially disrupt the trajectory of the 'big 3' console OEMs in 2013 or 2014. Discs will remain the console game revenue mainstay for years to come."

Key takeaways from the new forecast include:

- In December 2012, PS3 system shipments eclipsed the number of Xbox 360's shipped worldwide, despite the PS3 launching a year later than the Xbox 360 (an estimated 77 million bundles versus approximately 76 million bundles shipped)
- Nintendo's Wii U will find an audience; global bundle shipments will exceed 50 million by year-end 2016 - The volume of packaged game discs shipped will decline an average of roughly 3% per year through 2016, as console spending shifts into digital channels

Demand for Microsoft's and Sony's next- or eighth-generation consoles is also forecast, based on a set of clearly defined assumptions. As such, and mainly due to the effects of digital distribution, eighth-generation console tie ratios will be approximately 25% lower than the tie ratios of seventh- or current-generation consoles.

"2011 and 2012 were tough for many console game disc developers and publishers," added Ward. "With the advent of eighth-generation consoles, starting with the Wii U, historical norms strongly imply that game disc revenue will stop bleeding in 2013 and rise substantively in 2014."

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