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Report: Industry Revenue To Reach $70B In 2015 After Decline

Report: Industry Revenue To Reach $70B In 2015 After Decline

May 26, 2010 | By Chris Remo

May 26, 2010 | By Chris Remo
More: Console/PC

The video game industry will reach a global total of $70 billion in revenue by 2015, claims market analysis firm DFC -- but in the meantime the business will continue to suffer before turning around.

According to DFC's series of "Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry" reports, the financial decline that began in 2009 will continue until roughly 2013, with the positive growth taking place from then until 2015.

That explains why the $70 billion figure quoted by DFC is only a 16 percent increase over 2009's estimated global revenue of $60.4 billion.

Still, some areas are expected to demonstrate more robustness than others. Despite the retail decline of PC gaming, PC online and digital distribution revenue is "experiencing substantial growth" and is expected to comprise at least $20 billion of the $70 billion total in 2015.

And while consoles have traditionally lagged behind PCs in online integration, they're catching up -- DFC projects a fourfold increase in console online revenue in the next five years.

"The overall game industry is expected to undergo a decline as more consumers embrace online business models, many of which involve a significant free to play component," said DFC analyst David Cole. "These models may be more profitable than the traditional packaged goods business, but in the short term they provide less revenue."

As for the root causes of the ongoing decline, DFC pins it on "a slowdown in the current console systems from Microsoft, Nintendo and Sony," which may be exacerbated by broad expectations that this console generation will last significantly longer than historical cycles.

Both Microsoft and Sony are hoping their upcoming motion-based peripherals will help mitigate that mid-generation slowdown by infusing their consoles with new life. Yesterday, outgoing Xbox chief Robbie Bach characterized Natal as "a jumpstart catalyst" for the Xbox 360 platform.

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