LADYDRAGON.COM - Video Game Market Is Poised For Strong Growth According to DFC Intelligence

Thursday February 21, 2002

Video Game Market Is Poised For Strong Growth According to DFC Intelligence

According to a new report from DFC Intelligence, recent sales indicate that the video game market is poised for impressive growth.

The report forecasts that annual unit sales of video games and PC games in the U.S. is expected to grow over 40% from 2001 to 2006.

David Cole, president of DFC, said, "The successful introduction of four new game systems in 2000 and 2001 meant that the industry was able to avoid the major downturn in sales that has occurred in past platform transitions."

According to Cole, the industry should experience another year of record sales in 2002.

DFC estimates that by 2006 the three leading games systems, the Sony PlayStation 2, the Microsoft Xbox and the Nintendo GameCube, should have combined U.S. sales of over 60 million units. The report forecasts strong sales for all three systems. However, sales expectations are much stronger for some platforms and there are best and worst case scenarios for each platform. In the report, there is also a look at the potential successors to the existing platforms. This includes the PlayStation 3 and the possibility of new, unannounced systems from Microsoft and Nintendo. These systems are expected to be released between 2004 and 2006 and there are various scenarios forecasting how such systems might impact the market.

While strong market growth is predicted, there are also many challenges the interactive entertainment industry faces. The new report has a detailed look at business challenges, industry economics, retail and online distribution, consumer profiles, game genres and other industry trends.

The main challenge is that while unit sales are expected to rise rapidly, development and marketing costs are also soaring.

According to Cole, "The game business is starting to look like the movie industry. This has become a high risk/high reward industry where a handful of winners must make up for the money lost on the majority of products."

The new report entitled "The U.S. Market for Video Games and Interactive Electronic Entertainment" is 800 pages and contains complete forecasts to the year 2006. DFC Intelligence is a research firm focused on interactive entertainment. DFC also publishes "The Online Game Market 2001," "The State of Game Technology" and detailed profiles of game publishers. For more information call 858/780-9680 or go to www.dfcint.com.