Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry:
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1 DFC Intelligence DFC Intelligence Phone Carmel Mountain Rd Fax Suite C San Diego, CA Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry: 2004 Update #1 April 2004
2 Conditions of Purchase Purchase of this multi-client study is on a nonexclusive basis. This study has not been commissioned or contracted for by any one person or organization. The information contained is confidential to the purchaser, and the purchaser agrees not to circulate or loan the study in whole or in part to: their subsidiaries or divisions, industry trade associations (if not the purchaser), the general public, the media, nor other parties not belonging to their company, agency or organization. Unauthorized reproduction and dissemination which is discovered by DFC Intelligence (the publisher) shall constitute grounds for legal prosecution and damages under U. S. copyright law. DFC Intelligence has made every attempt to verify the accuracy and completeness of information in this study from sources we believe to be reliable. It is understood, however, that our estimates, forecasts, opinions and recommendations represent the judgment of our analysts, based on the best information available at the time of publication. It is recommended that purchasers also consult other available business sources and not rely solely on this analysis as the basis for major strategic, financial, or management decisions. DFC Intelligence makes no warranty or representation, either expressed or implied, with respect to the information in this report. In no event will DFC Intelligence be liable for direct, indirect or consequential damages resulting from any defect or inaccuracy in this report, even if advised of the possibility of such damages. Information about specific companies is not intended to be a complete description, nor of their securities, nor is this study an offer to buy or sell such securities. DFC Intelligence s liability, if any, shall not exceed the amount paid for this study. 2
3 About This Report This report is part of our Worldwide Market Forecast series. Starting in 2004, DFC Intelligence will be publishing its forecasts in a series of smaller reports, which will then be bundled together as a larger report, Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry. As such this report is designed to supplement and update data from the last full version of Worldwide Market Forecasts published in April The focus of this report is on charts, graphs and numbers. There is not a great deal of analysis of industry trends. We save most of our analysis of trends, game genres and business issues to other DFC reports such as The Business of Computer and Video Games, The Online Game Market and Market Leaders in the Video Game and Interactive Entertainment Industry. This report aggregates sales figures for the three major markets, the U.S., Japan and Europe. Starting in 2004 we are adding forecasts for the rest of the world which includes Canada and the rest of the Asia Pacific region outside Japan. There are a couple of points to note about this type of aggregation. First, no one tracks all three markets on the same level. A major challenge in analyzing the interactive entertainment market is imperfect data. There are several services that track software sales for individual markets around the world. These include the NPD Group/NPD Funworld/TRSTS service that tracks U.S. sales (in February 2004 they started covering Canada), NPD Techworld (PC Data) for PC game sales, ELSPA/Chart-Track for the U.K., AC Nielsen Canada, Media Control and GfK in Europe. Japan data is available from several services including Media Create and the magazines Famitsu and Dengeki (owned by Kadokawa Shoten). DFC Intelligence has been working on building a model to track worldwide sales since In addition to looking at the retail tracking services we closely tracked manufacturer s estimates and the sales individual companies reported as part of their required stock filings. This report represents the results of that model. However, we caution that a completely accurate picture of overall sales is impossible to come by. It should also be noted that there are other areas of consumer spending on interactive entertainment that are not tracked in this report. This would include spending on game accessories, game publications, game rentals, used games and a significant portion of the online game market. Those areas probably account for an additional $7-10 billion in worldwide consumer spending. Therefore, the numbers in this report tend to the conservative side. However, we feel they do give a solid indication of relative size and growth potential. Finally, when it comes to warnings, there is the issue of the exchange rate. The numbers in this report come from different countries and thus results can be greatly affected by changes in the exchange rate. We have converted everything to dollars using a constant exchange rate, both for reporting current numbers and past numbers. This exchange rate is 1 U.S. dollar equals 120 yen, 1.45 British pounds and 1Euro. Of course, recently the dollar has been much weaker against foreign currency. We caution that in 2004 we are in the process of readjusting our numbers for fluctuating currency ratios and thus the actual numbers may change. This will be especially true as we start adjusting historical numbers for currency fluctuations. Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry contains multiple scenarios for market forecasting. This supplement report provides only one scenario. Future updates in this series will provide different scenarios that assume different product launch dates, different product pricing and different success rates for individual systems. The forecasts in this report are through 2009 and are broken down by 1) region (U.S., Europe, Japan and the rest of the world (ROW)), 2) platform (portable, PC games, 32/64-bit, 128-bit and future game systems expected to be released after 2004) and 3) hardware versus software sales. 3
4 Table of Contents I. EXECUTIVE SUMMARY 10 A. OVERVIEW 10 B. SUMMARY OF TOTAL WORLDWIDE SALES MARKET FORECASTS: C. SUMMARY OF PORTABLE GAME MARKET FORECASTS: D. SUMMARY OF PC GAME MARKET FORECASTS: E. SUMMARY OF 128-BIT AND FUTURE GAME SYSTEMS MARKET FORECASTS Summary of 128-Bit Market Forecasts: Summary of Future Game Systems Market Forecasts: F. SUMMARY OF VIDEO GAME CONSOLE MARKET FORECASTS: II. THE PORTABLE MARKET: A. U.S. PORTABLE MARKET B. EUROPEAN PORTABLE MARKET C. JAPAN PORTABLE MARKET D. REST OF THE WORLD PORTABLE MARKET E. WORLDWIDE PORTABLE MARKET Worldwide Portable System Hardware Worldwide Portable System Software 49 Total Worldwide Portable Market 52 III. THE PC GAME MARKET: A. U.S. PC GAME MARKET B. EUROPEAN PC GAME MARKET Rest of the World PC Game Market Total PC Game Market IV. THE 32/64-BIT MARKET: A. U.S. 32/64-BIT MARKET B. EUROPEAN 32/64-BIT MARKET C. JAPAN 32/64-BIT MARKET D. ROW 32/64-BIT MARKET E. WORLDWIDE 32/64-BIT MARKET Worldwide 32/64-Bit System Hardware Worldwide 32/64-bit System Software Total Worldwide 32/64-Bit Market 83 V. THE 128-BIT MARKET: A. SCENARIO 1: U.S. 128-BIT MARKET FORECASTS 85 B. SCENARIO 1: EUROPE 128-BIT MARKET FORECASTS 94 C. SCENARIO 1: JAPAN 128-BIT MARKET FORECASTS 103 D. SCENARIO 1: REST OF THE WORLD 128-BIT MARKET FORECASTS 112 E. SCENARIO 1: WORLDWIDE 128-BIT MARKET FORECASTS:
5 VI. BEYOND THE 128-BIT MARKET: A. SCENARIO 1: U.S. FUTURE GAME SYSTEM MARKET FORECASTS 130 B. SCENARIO 1: EUROPE FUTURE GAME SYSTEM MARKET FORECASTS 134 C. SCENARIO 1: JAPAN FUTURE GAME SYSTEM MARKET FORECASTS 138 D. SCENARIO 1: REST OF THE WORLD FUTURE GAME SYSTEM MARKET FORECASTS 142 E. SCENARIO 1: WORLDWIDE FUTURE GAME SYSTEM MARKET FORECASTS 146 VII. TOTAL WORLDWIDE FORECASTS FOR INTERACTIVE ENTERTAINMENT: A. OVERVIEW 153 B. TOTAL WORLDWIDE HARDWARE MARKET Scenario 1: Worldwide Video Game Console System Hardware Scenario 1: Worldwide Total Console and Portable Hardware Sales 156 C. TOTAL WORLDWIDE SOFTWARE MARKET Scenario 1: Worldwide Video Game Console System Software Scenario 1: Worldwide Total Software Sales 165 D. TOTAL WORLDWIDE INTERACTIVE ENTERTAINMENT MARKET: VIII. INDIVIDUAL GAME SYSTEM FORECASTS 180 A. INDIVIDUAL 128-BIT SYSTEM FORECASTS Sony PlayStation 2 Sales Forecasts Nintendo GameCube Sales Forecasts Microsoft Xbox Sales Forecasts 184 B. INDIVIDUAL FUTURE GAME SYSTEM FORECASTS Sony PlayStation 2 Sales Forecasts Nintendo GameCube 2/N5 Sales Forecasts Microsoft Xbox 2/Xbox Next Sales Forecasts 190 C. INDIVIDUAL PORTABLE GAME SYSTEM FORECASTS Nintendo Game Boy Advance Sales Forecasts Sony PSP Sales Forecasts Nokia N-Gage Sales Forecasts 196 5
6 LIST OF TABLES Table 1 Scenario 1: Total Worldwide Sales for Software and Hardware: Table 2 Scenario 1: Worldwide Total Hardware Sales: Table 3 Scenario 1: Worldwide Total Software Sales: Table 4 Total Worldwide Sales for Portable Game Systems: Table 5 Worldwide Sales for PC Entertainment Software: Table 6 Scenario 1: Forecasts for Worldwide Hardware Unit Sales of 128-Bit Systems: Table 7 Scenario 1: Forecasts for Worldwide Software Revenue of 128-Bit Systems: Table 8 Scenario 1: Forecasts for Total Worldwide 128-Bit Market: *...21 Table 9 Scenario 1: Forecasts for Worldwide Hardware Unit Sales of Future Game Systems: Table 10 Scenario 1: Forecasts for Worldwide Software Revenue of Future Game Systems: Table 11 Scenario 1: Forecasts for Total Worldwide Future Game Systems Market: Table 12 Scenario 1: Worldwide Total Console Hardware Sales: Table 13 Scenario 1: Worldwide Software Sales for Console Video Game Systems: Table 14 Forecasts for U.S. Portable Hardware: Table 15 Forecasts for U.S. Portable Software: Table 16 Forecasts for U.S. Portable Market: Table 17 Forecasts for European Portable Hardware: Table 18 Forecasts for European Portable Software: Table 19 Forecasts for Europe Portable Market: Table 20 Forecasts for Japan Portable Hardware: Table 21 Forecasts for Japan Portable Software: Table 22 Forecasts for Japan Portable Market: Table 23 Forecasts for ROW Portable Hardware: Table 24 Forecasts for ROW Portable Software: Table 25 Forecasts for ROW Portable Market: Table 26 Worldwide Hardware Sales for Portable Game Systems: Table 27 Forecasts for Worldwide Portable Hardware: Table 28 Worldwide Software Sales for Portable Game Systems: Table 29 Forecasts for Worldwide Portable Software: Table 30 Total Worldwide Sales for Portable Game Systems: Table 31 Worldwide Sales for Portable Game Systems: Table 32 Forecasts for Worldwide Portable Market: Table 33 U.S. Sales for PC Entertainment Software: Table 34 European Sales for PC Entertainment Software: Table 35 ROW Sales for PC Entertainment Software: Table 36 Worldwide Sales for PC Entertainment Software: Table 37 Total Worldwide Sales for PC Game Software: Table 38 Forecasts for U.S. 32/64-Bit Hardware: Table 39 Forecasts for U.S. 32/64-Bit Software: Table 40 Forecasts for U.S. 32/64-Bit Market: Table 41 Forecasts for European 32/64-Bit Hardware: Table 42 Forecasts for European 32/64-Bit Software: Table 43 Forecasts for Europe 32/64-Bit Market: Table 44 Forecasts for Japan 32/64-Bit Hardware: Table 45 Forecasts for Japan 32/64-Bit Software: Table 46 Forecasts for Japan 32/64-Bit Market: Table 47 Forecasts for ROW 32/64-Bit Hardware:
7 Table 48 Forecasts for ROW 32/64-Bit Software: Table 49 Forecasts for ROW 32/64-Bit Market: Table 50 Forecasts for Worldwide 32/64-Bit Hardware: Table 51 Forecasts for Worldwide 32/64-Bit Software: Table 52 Forecasts for Worldwide 32/64-Bit Market: Table 53 Scenario 1: Forecasts for U.S. Hardware Unit Sales of 128-Bit Systems: Table 54 Scenario 1: Forecasts for U.S. Hardware Revenue of 128-Bit Systems: Table 55 Scenario 1: Forecasts for U.S. Software Unit Sales of 128-Bit Systems: Table 56 Scenario 1: Forecasts for U.S. Software Revenue of 128-Bit Systems: Table 57 Scenario 1: Forecasts for Total U.S. 128-Bit Market: *...89 Table 58 Scenario 1: Active U.S. Installed Base of 128-Bit Game Systems: Table 59 Scenario 1: Cumulative U.S. Installed Base of 128-Bit Game Systems: Table 60 Scenario 1: Forecasts for Europe Hardware Unit Sales of 128-Bit Systems: Table 61 Scenario 1: Forecasts for Europe Hardware Revenue of 128-Bit Systems: Table 62 Scenario 1: Forecasts for Europe Software Unit Sales of 128-Bit Systems: Table 63 Scenario 1: Forecasts for Europe Software Revenue of 128-Bit Systems: Table 64 Scenario 1: Forecasts for Total Europe 128-Bit Market: *...98 Table 65 Scenario 1: Active Europe Installed Base of 128-Bit Game Systems: Table 66 Scenario 1: Cumulative Europe Installed Base of 128-Bit Game Systems: Table 67 Scenario 1: Forecasts for Japan Hardware Unit Sales of 128-Bit Systems: Table 68 Scenario 1: Forecasts for Japan Hardware Revenue of 128-Bit Systems: Table 69 Scenario 1: Forecasts for Japan Software Unit Sales of 128-Bit Systems: Table 70 Scenario 1: Forecasts for Japan Software Revenue of 128-Bit Systems: Table 71 Scenario 1: Forecasts for Total Japan 128-Bit Market: * Table 72 Scenario 1: Active Japan Installed Base of 128-Bit Game Systems: Table 73 Scenario 1: Cumulative Japan Installed Base of 128-Bit Game Systems: Table 74 Scenario 1: Forecasts for ROW Hardware Unit Sales of 128-Bit Systems: Table 75 Scenario 1: Forecasts for ROW Hardware Revenue of 128-Bit Systems: Table 76 Scenario 1: Forecasts for ROW Software Unit Sales of 128-Bit Systems: Table 77 Scenario 1: Forecasts for ROW Software Revenue of 128-Bit Systems: Table 78 Scenario 1: Forecasts for Total ROW 128-Bit Market: * Table 79 Scenario 1: Active ROW Installed Base of 128-Bit Game Systems: Table 80 Scenario 1: Cumulative ROW Installed Base of 128-Bit Game Systems: Table 81 Scenario 1: Forecasts for Worldwide Hardware Unit Sales of 128-Bit Systems: Table 82 Scenario 1: Forecasts for Worldwide Hardware Revenue of 128-Bit Systems: Table 83 Scenario 1: Forecasts for Worldwide Software Unit Sales of 128-Bit Systems: Table 84 Scenario 1: Forecasts for Worldwide Software Revenue of 128-Bit Systems: Table 85 Scenario 1: Forecasts for Total Worldwide 128-Bit Market: * Table 86 Scenario 1: Active Worldwide Installed Base of 128-Bit Game Systems: Table 87 Scenario 1: Cumulative Worldwide Installed Base of 128-Bit Game Systems: Table 88 Scenario 1: Forecasts for U.S. Hardware Unit Sales of Future Game Systems: Table 89 Scenario 1: Forecasts for U.S. Hardware Revenue of Future Game Systems: Table 90 Scenario 1: Forecasts for U.S. Software Unit Sales of Future Game Systems: Table 91 Scenario 1: Forecasts for U.S. Software Revenue of Future Game Systems:
8 Table 92 Scenario 1: Forecasts for U.S. Active Installed Base of Future Game Systems: Table 93 Scenario 1: Forecasts for Total U.S. Future Game Systems Market: Table 94 Scenario 1: Forecasts for Europe Hardware Unit Sales of Future Game Systems: Table 95 Scenario 1: Forecasts for Europe Hardware Revenue of Future Game Systems: Table 96 Scenario 1: Forecasts for Europe Software Unit Sales of Future Game Systems: Table 97 Scenario 1: Forecasts for Europe Software Revenue of Future Game Systems: Table 98 Scenario 1: Forecasts for Europe Active Installed Base of Future Game Systems: Table 99 Scenario 1: Forecasts for Total Europe Future Game Systems Market: Table 100 Scenario 1: Forecasts for Japan Hardware Unit Sales of Future Game Systems: Table 101 Scenario 1: Forecasts for Japan Hardware Revenue of Future Game Systems: Table 102 Scenario 1: Forecasts for Japan Software Unit Sales of Future Game Systems: Table 103 Scenario 1: Forecasts for Japan Software Revenue of Future Game Systems: Table 104 Scenario 1: Forecasts for Japan Active Installed Base of Future Game Systems: Table 105 Scenario 1: Forecasts for Total Japan Future Game Systems Market: Table 106 Scenario 1: Forecasts for ROW Hardware Unit Sales of Future Game Systems: Table 107 Scenario 1: Forecasts for ROW Hardware Revenue of Future Game Systems: Table 108 Scenario 1: Forecasts for ROW Software Unit Sales of Future Game Systems: Table 109 Scenario 1: Forecasts for ROW Software Revenue of Future Game Systems: Table 110 Scenario 1: Forecasts for ROW Active Installed Base of Future Game Systems: Table 111 Scenario 1: Forecasts for Total ROW Future Game Systems Market: Table 112 Scenario 1: Forecasts for Worldwide Hardware Unit Sales of Future Game Systems: Table 113 Scenario 1: Forecasts for Worldwide Hardware Revenue of Future Game Systems: Table 114 Scenario 1: Forecasts for Worldwide Software Unit Sales of Future Game Systems: Table 115 Scenario 1: Forecasts for Worldwide Software Revenue of Future Game Systems: Table 116 Scenario 1: Forecasts for Total Worldwide Future Game Systems Market: Table 117 Scenario 1: Active Worldwide Installed Base of Future Game Systems: Table 118 Scenario 1: Worldwide Total Console Hardware Sales: Table 119 Scenario 1: Worldwide Total Hardware Sales: Table 120 Scenario 1: Worldwide Total Hardware Sales: Table 121 Scenario 1: Worldwide Total Hardware Sales by Type of System: Table 122 Scenario 1: Worldwide Total Hardware Unit Sales by Type of System: Table 123 Scenario 1: Worldwide Software Sales for Console Video Game Systems:
9 Table 124 Scenario 1: Worldwide Total Software Sales: Table 125 Scenario 1: Worldwide Total Software Sales: Table 126 Scenario 1: Worldwide Total Software Sales by Type of System: Table 127 Scenario 1: Worldwide Total Software Unit Sales by Type of System: Table 128 Scenario 1: Total Worldwide Sales for Software and Hardware: Table 129 Scenario 1: Total Worldwide Sales for Software and Hardware by Region: Table 130 Scenario 1: Total Worldwide Sales for Interactive Entertainment Industry: Table 131 Scenario 1: Total U.S. Sales for Software and Hardware by System Type: Table 132 Scenario 1 U.S. Sony PlayStation 2 Sales: Table 133 Scenario 1 Europe Sony PlayStation 2 Sales: Table 134 Scenario 1 Japan Sony PlayStation 2 Sales: Table 135 Scenario 1 ROW Sony PlayStation 2 Sales: Table 136 Scenario 1 Worldwide Sony PlayStation 2 Sales: Table 137 Scenario 1 U.S. Nintendo GameCube Sales: Table 138 Scenario 1 Europe Nintendo GameCube Sales: Table 139 Scenario 1 Japan Nintendo GameCube Sales: Table 140 Scenario 1 ROW Nintendo GameCube Sales: Table 141 Scenario 1 Worldwide Nintendo GameCube Sales: Table 142 Scenario 1 U.S. Microsoft Xbox Sales: Table 143 Scenario 1 Europe Microsoft Xbox Sales: Table 144 Scenario 1 Japan Microsoft Xbox Sales: Table 145 Scenario 1 ROW Microsoft Xbox Sales: Table 146 Scenario 1 Worldwide Microsoft Xbox Sales: Table 147 Scenario 1 U.S. Sony PlayStation 3 Sales: Table 148 Scenario 1 Europe Sony PlayStation 3 Sales: Table 149 Scenario 1 Japan Sony PlayStation 3 Sales: Table 150 Scenario 1 ROW Sony PlayStation 3 Sales: Table 151 Scenario 1 Worldwide Sony PlayStation 3 Sales: Table 152 Scenario 1 U.S. Nintendo GameCube 2/N5 Sales: Table 153 Scenario 1 Europe Nintendo GameCube 2/N5 Sales: Table 154 Scenario 1 Japan Nintendo GameCube 2/N5 Sales: Table 155 Scenario 1 ROW Nintendo GameCube 2/N5 Sales: Table 156 Scenario 1 Worldwide Nintendo GameCube 2/N5 Sales: Table 157 Scenario 1 U.S. Microsoft Xbox 2/Xbox Next Sales: Table 158 Scenario 1 Europe Microsoft Xbox 2/Xbox Next Sales: Table 159 Scenario 1 Japan Microsoft Xbox 2/Xbox Next Sales: Table 160 Scenario 1 ROW Microsoft Xbox 2/Xbox Next Sales: Table 161 Scenario 1 Worldwide Microsoft Xbox 2/Xbox Next Sales: Table 162 Scenario 1 U.S. Nintendo Game Boy Advance Sales: Table 163 Scenario 1 Europe Nintendo Game Boy Advance Sales: Table 164 Scenario 1 Japan Nintendo Game Boy Advance Sales: Table 165 Scenario 1 ROW Nintendo Game Boy Advance Sales: Table 166 Scenario 1 Worldwide Nintendo Game Boy Advance Sales: Table 167 Scenario 1 U.S. Sony PSP Sales: Table 168 Scenario 1 Europe Sony PSP Sales: Table 169 Scenario 1 Japan Sony PSP Sales: Table 170 Scenario 1 ROW Sony PSP Sales: Table 171 Scenario 1 Worldwide Sony PSP Sales: Table 172 Scenario 1 U.S. Nokia N-Gage Sales: Table 173 Scenario 1 Europe Nokia N-Gage Sales: Table 174 Scenario 1 ROW Nokia N-Gage Sales: Table 175 Scenario 1 Worldwide Nokia N-Gage Sales:
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