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September 2013
Packaged console games market to grow by $400m+ in 2014


With the launch of Xbox One and PS4 confirmed for Q4 this year (Asia 2014), the global packaged console games market will increase by $430 million in retail value in 2014, helping drive the total global packaged games software market to £18.7 billion according to a new console, handheld and PC gaming market report from Futuresource Consulting.

"The launch of next gen consoles will revitalise the market for package console games in 2014, bucking the downward trend that we've seen in recent years," says Sam Leech, Research Analyst at Futuresource Consulting. "This despite the fact that both Xbox One and PS4 are shifting further towards digital delivery, with games available for play almost immediately, while the download completes in the background. However, the sales uptick in packaged console games won't be enough to halt the decline in packaged media sales from handheld and PC games, with the total global packaged games software market dropping by nearly 12% CAGR between 2013 and 2017."

The Next Gen Battleground
Both consoles will launch in Q4 2013 in their respective major markets (Asia will be in 2014), with the Xbox One carrying a price tag of around $100 more than the PS4, which may likely influence buying decisions and shift some loyalties.

"We expect the Xbox One to sell well in the USA due to existing customer loyalty; repositioning as an integrated multimedia home hub will open up further market opportunities, though it is launching into a crowded marketplace, so gaining a strong foothold in this category will be challenging. In its first five years our forecasts show the Xbox One will reach an installed base of 30 million in the USA, Western Europe and Japan combined.

"The PS4 is likely to maintain its strong lead in its core territories of Japan and continental Europe; in its first five years, we expect the PS4 to have achieved an installed base of nearly 36 million units in the USA, Western Europe and Japan combined. Due to its lower price point and positive PR within the gaming community, the PS4 will also reduce Xbox's lead in the key Microsoft territories of the USA and UK when compared with previous generations.

"Due to the increased availability of high-quality alternative gaming platforms such as mobile devices, as well as expected propositions from tech powerhouses Apple and Google, we expect the installed bases of the Xbox One and PS4 to be 20% lower than those of the previous generation after five years on the market. With increased market convergence and non-traditional competition, we could be looking at the last generation of gaming consoles as we know it."

Handheld Gaming Platforms Diversifying
Dedicated handheld gaming is the area hardest hit by the advancements in gaming on non-dedicated devices such as smartphones, tablets and set-top boxes. Futuresource expects sales of handheld games consoles to decline from 20.8 million in 2013 across USA, Western Europe and Japan to 5.8 million by 2017. September has seen both Nintendo and Sony announce plans to reinvent their handheld console lines at lower price points: Nintendo's 2DS console aimed primarily at children will cost only $129; Sony's Vita TV has removed the screen and controllers from its PlayStation Vita entirely, adding a HDMI input which will transform the device into a DMA for gaming costing around $100.

The Decline of the Disc and the Rise of Digital
Although packaged games media as a whole is falling, the growth of digital games software (which includes console, online and mobile) is set to increase by 25% in retail value by 2017, offsetting the decline in packaged media and delivering an increase in overall games retail value of 3.2% in the same time period.

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Notes
The Console, Handheld & PC Gaming Market & Forecast update is captured in a 28 page report, available now. For more information about this report or to make a purchase either visit www.futuresource-consulting.com or get in touch with Andy Watson via andy.watson@futuresource-hq.com.

Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments. www.futuresource-consulting.com.

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Meet the Futuresource team
  Sam Leech Sam Leech
Research Analyst
 
A recent economics graduate, Sam is part of the Entertainment Content & Delivery team, working primarily on the videogames market.

Sam joined Futuresource in 2013 after completing his BSc (Hons) in Economics with German at the University of Birmingham.

Within the Entertainment Content & Delivery team, Sam is involved in analysing content markets across a wide variety of platforms from the cinema to mobile devices. Recent reports on the global videogames industry have involved an in-depth analysis of both hardware and software markets, as well as prognosis for the transition to digitally distributed content.

Meet the Futuresource team
 
Carl Hibbert
Carl Hibbert
Associate Director of Entertainment Content & Delivery

Carl heads up the team responsible for research and analysis across TV infrastructure, delivery and content, video, games, music and optical disc manufacturing and distribution.

Prior to this, Carl was lead broadcast analyst at Futuresource and has also held positions in Futuresource's professional storage and home entertainment team where he provided strategic insight and consulting on video on demand, Blu-ray, OTT, rights management and international distribution.

Carl regularly presents at key international industry conferences including IBC, EBU, IABM, Samsung's NASO event and the Futuresource Entertainment Summit and is a contributor to press and trade journals.

Meet the Futuresource team
  Andy Watson Futuresource Andy Watson
Associate Director of Marketing
 
For all press enquiries, please contact Andy Watson:
Direct Dial: +44 (0)1582 500 169
Switchboard: +44 (0)1582 500 100
Email: andy.watson@futuresource-hq.com
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