Table of Contents
Introduction and Abbreviations
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- Introduction
- Date of last report
- Definition
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Sales slow in transition to next-generation consoles
- Holiday period is critical
- Next-generation consoles arrive
- Product innovation
- Minorities, teens, and higher-income households drive market
- Big names dominate the market
- Adspend to increase in 2006
- Traditional retail distribution prevails; online distribution lurks for software
- Consumers own multiple platforms and use them for multiple purposes
- Future is in the hands of next-generation consoles and games
- Two years of growth ahead
Market Drivers
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- New consoles drive sales
- Game sales slow when consumers wait for new consoles
- Internet subscription services expand product desirability
- New games expand gaming to non-core consumers
- Launch and holiday periods are critical
- Used games/rentals
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- Figure 1: Top video game rentals for week ended 4/23/06
- Synergies between games, movies, and sports drive game sales
- Community-based media outlets promote interest in gaming
- In spite of increasing competition for leisure time, time spent gaming is rising
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- Figure 2: Hours per person per year using consumer media—U.S., 1998-2008
- Demographic influences
- Household income
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- Figure 3: Video game penetration and average amount spent on video games, by household income, January-September 2005
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- Figure 4: Distribution of households, by income, 1999 and 2005
- Age
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- Figure 5: Video game penetration, by age, January-September 2005
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- Figure 6: U.S. population, by age, 2000-10
- Figure 7: Total number of gamers in the U.S., by age, 2005 and 2010
- Race
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- Figure 8: Video game penetration, by race/ethnicity, January-September 2005
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- Figure 9: U.S. population, by race/ethnicity, 2000 and 2010
- Figure 10: Total number of gamers in the U.S., by race/ethnicity, 2005 and 2010
Market Size and Trends
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- Figure 11: Total U.S. retail sales of new video game consoles, games and in-game advertising, at current and constant prices, 2002-05
- Figure 12: Graph: U.S. retail sales of new video game consoles, games and in-game advertising, at current and constant prices*, 2002-05
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Market Segmentation
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- Overview
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- Figure 13: Video game consoles and games and in-game advertising revenue, segmented by type, 2003 and 2005
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- Figure 14: Video game consoles and games and in-game advertising revenue, 2005
- Console games
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- Figure 15: Sales of console game software, at current and constant prices, 2002-05
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- Figure 16: Top-selling console games, by units sold, 2005
- Console hardware
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- Figure 17: Sales of console hardware, at current and constant prices, 2002-05
- In-game advertising
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- Figure 18: Revenue from in-game advertising, at current and constant prices, 2002-05
Supply Structure
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- Overview
- Console hardware
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- Figure 19: Manufacturer unit sales of game consoles in the U.S., 2003 and 2005
- Figure 20: Graph: Share of console sales, 2003 and 2005
- Console game software
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- Figure 21: U.S. market share of games, by publisher for current-generation consoles—life-to-March 2005*
- Company profiles—console manufacturers
- Microsoft Corporation
- Nintendo of America
- Sony Computer Entertainment America, Inc.
- Company profiles—software developers and publishers
- Activision
- Electronic Arts
- LucasArts Entertainment Company
- Take-Two Interactive
- THQ, Inc.
Advertising and Promotion
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- Introduction
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- Figure 22: Advertising expenditures for selected video game brands, 2003-05*
- Figure 23: Graph: Advertising expenditures for selected video game brands, 2003 and 2005*
- Companies and brands
- Microsoft
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- Figure 24: Television Spot “Jump Rope” for Xbox 360, 2005
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- Figure 25: Television Spot “FunBox” for Xbox game titles, 2005
- Sony
- Nintendo
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- Figure 26: Television Spot “Sonic Riders” for Nintendo GameCube, 200?
- Electronic Arts
- Take-Two
Retail Distribution
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- Introduction
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- Figure 27: Retail channel preferences for console hardware and game purchases, June 2006
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- Figure 28: Retail outlet used for most recent console or game purchase, June 2006
- Figure 29: Graph: Retail outlet used for most recent console or game purchase, June 2006
- Retailer profiles
- Wal-Mart
- Best Buy
- GameStop
- Target
- eBay
- Amazon
The Consumer
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- Introduction
- Summary
- Adults
- Video console penetration
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- Figure 30: Video game console ownership, by selected demographics, January-September 2005
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- Figure 31: Married couples cohorts
- Platform ownership trends and preferences
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- Figure 32: Selected video game console ownership, 2002-05
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- Figure 33: Types of video game consoles owned, by age, January-September 2005
- Purchase plans for next-generation offerings
- Primary gamer
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- Figure 34: Primary gamer, by gender, June 2006
- Genre of games preferred
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- Figure 35: Game genre preferences, by age, January-September 2005
- Game purchases
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- Figure 36: Number of games purchased per year, demographic profile, January-September 2005
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- Figure 37: Graph: Incidence of console ownership and software purchase rate, by age, January-September 2005
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- Figure 38: Number of games purchased in last year, by console platform, June 2006
- Trusted sources for learning about new games
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- Figure 39: Influencers of the buying decision, by age, June 2006
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- Figure 40: Influencers of the buying decision, by relationship to the gaming console, June 2006
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- Figure 41: Influencers of the buying decision, by household income, June 2006
- Uses and desires for game consoles
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- Figure 42: Current and future uses of the video console, June 2006
- Gamer beliefs and behaviors
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- Figure 43: Perceptions of product scope and diversity, by age, June 2006
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- Figure 44: Buying behavior, by age, June 2006
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- Figure 45: Attitudes toward games and consoles, by age, June 2006
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- Figure 46: Attitudes and awareness of in-game advertising and related marketing offerings, by age, June 2006
- Teens
- Video game usage
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- Figure 47: Teen video game usage, by selected demographics, January-September 2005
- Platform experience
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- Figure 48: Platform experience and location of game play, June 2006
- Genre of games preferred
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- Figure 49: Game genre preferences, by gender and age, January-September 2005
- Hours played
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- Figure 50: Hours played by teens, by gender and age, January-September 2005
- Number of games purchased
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- Figure 51: Number of games purchased in last year by teens, by selected demographics, June 2006
- How game machines are/could be used
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- Figure 52: Teen current and future uses of the video console, June 2006
- Teen opinions and behaviors
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- Figure 53: Teen game beliefs and behaviors, by gender, June 2006
- Sources of game recommendations
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- Figure 54: Sources of information about new games, by gender, June 2006
- Game perceptions
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- Figure 55: Teen gaming perceptions, by gender, June 2006
- Interest in next-generation products
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- Figure 56: Teen purchase intent for next-generation products, by gender, June 2006
- Kids
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- Figure 57: Genre preferences of kids, by gender, January-September 2005
- Race/ethnicity
- Video game ownership
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- Figure 58: Video game console ownership, by race/ethnicity, January-September 2005
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- Figure 59: Types of video game consoles owned, by race/ethnicity, January-September 2005
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- Figure 60: Types of video game consoles owned, by race/ethnicity, January-September 2005
- Genre of games preferred
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- Figure 61: Game genre preferences, by race/ethnicity, January-September 2005
- Purchase frequency
- Sources for learning about new games
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- Figure 62: Influencers of the buying decision, by race/ethnicity, June 2006
- How consoles are used
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- Figure 63: Current and future uses of the video console, by race/ethnicity, June 2006
- Gaming opinions
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- Figure 64: Perceptions of product scope and diversity, by race/ethnicity, June 2006
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- Figure 65: Buying behavior, by race/ethnicity, June 2006
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- Figure 66: Attitudes toward games and consoles, by race/ethnicity, June 2006
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- Figure 67: Attitudes and awareness of in-game advertising and related marketing offerings, by race/ethnicity, June 2006
- Hours played by teens and kids, by race/ethnicity
Future and Forecast
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- Future trends
- Industry strength depends on smoothness of transition
- Higher prices for consoles and games could constrain unit sales
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- Figure 68: Next-generation console and games launch prices, 2006
- Here comes Microsoft
- Game consoles are not just for gaming anymore
- In-game advertising will reach the console
- Online gaming services become a greater part of console gaming
- Lower-priced, shorter-format games
- Market forecast
- Video game consoles, games, and in-game advertising
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- Figure 69: Forecast of total U.S. sales of video game consoles, games, and in-game advertising, at current and constant prices, 2005-07
- Figure 70: Forecast of total U.S. sales of video game consoles, games, and in-game advertising, at current prices 2005-07
- Forecast factors
Appendix: Trade Associations
Appendix: Simmons Cohorts
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- Figure 71: Married couples cohorts
- Figure 72: Single women cohorts
- Figure 73: Single men cohorts
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