- Contents
- *Scope and Themes
- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
What you need to know
Based on Mintel’s consumer research about one in five adults played online games in the 30 days prior to being surveyed in 2011, and according to Nielsen, an estimated 10% of time spent online is devoted to playing games—proof that online gaming is a source of entertainment for many adults. Yet, only about one third of adults who play games on social networks or online sites spend money to play them—advertising will continue to be an important revenue source for realizing the value of those who play for free, while an increase in the share of gamers who buy virtual goods or make other in-game purchases will prove critical for revenue growth going forward.
Facebook is the most popular social network gaming site. Yet, despite enthusiasm about the power of social networks, the majority of adults who play games on social networks or online portals play alone most often. Changing this dynamic will be a critical component in the next phase of social game development. In this report, Mintel examines the growing social network/online portal gaming market, and answers the following questions:
What is the historical, current and forecast revenue for social/online games?
How are social/online games monetized? How does revenue from ads compare to revenue from in-game purchases?
Who are the leading developers and distributors?
What are the drivers of growth and where does social/online gaming fit in the overall gaming space (console, mobile or PC gaming)?
How do gamers learn about new games?
What are the demographics of social/online gamers and what are their gaming habits and attitudes?
How can social/online games be used as part of an overall branding strategy for consumer-facing brands entertainment, CPG companies, and retail brands that are not game publishers?
What are the future opportunities in game development, marketing, and promotion?
Definition
For purposes of this report, social network gaming includes any game play on a social network or dedicated online gaming site, from any device excluding smartphones and tablets, with a focus on games played between two or more people.
Game play on mobile devices (smartphones, tablets) and consoles/handhelds can also be multiplayer over the internet, they are not the primary subject of the report, being covered in Mintel’s Console Gaming—U.S., August 2011 and Mintel’s Mobile Gaming—U.S., May 2011 reports. However, where mobile and console players can play against gamers on social networks/online sites they are included in the discussion. Mobile and console game revenue is excluded from the market size data.
Market size data are provided for the “online” games market from PricewaterhouseCoopers’s Global Entertainment and Media Outlook 2011-2015. The market size excludes sales of hardware, mobile app purchases, and advertising revenue. As defined by PricewaterhouseCoopers, “the online games category includes microtransactions, which are players’ purchases of accessories and additional game content that enhance the gaming experience. Oftentimes, online games are first purchased at retail and then played online. When these games are then played online for a subscription fee, the subscription fee is counted in the online games category.” While the focus of this report is multiplayer games, market size data includes any sales related to a game played on online (e.g. solitaire other casual games) whether it is multiplayer or not.
Value figures throughout this report are at retail selling prices (rsp) excluding sales tax unless otherwise stated.
Sales data
Market Size and Forecast: PricewaterhouseCoopers’s Global Entertainment and Media Outlook 2011-2015
Competitive Context section: Nielsen NetView—June 2009-June 2010, Nielsen Social Media Report Q3 2011, PricewaterhouseCoopers’ Global Entertainment and Media Outlook and the Consumer Electronics Association
Leading Companies: Application data provided by AppData.
Consumer survey data
For the purposes of this report, Mintel commissioned exclusive consumer research through Toluna USA to explore consumer consumption of/attitudes and behaviors towards social network gaming. Mintel was responsible for the survey design, data analysis and reporting. Fieldwork was conducted July 7-19, 2011 among a sample of 2,000 adults aged 18+ with access to the internet.
Mintel selects survey respondents so that they are proportionally balanced to the entire U.S. adult population based on the key demographics of gender, age, household income, and region. Mintel also slightly oversamples, relative to the population, respondents that are Hispanic or black to ensure an adequate representation of these groups in our survey results. Please note that Mintel’s exclusive surveys are conducted online and in English only. Hispanics who are not online and/or do not speak English are not included in our survey results.
Mintel has also analyzed data from Experian Consumer Research, using the Simmons National Consumer Survey (NCS) and the Simmons National Hispanic Consumer Survey (NHCS. The NCS/NHCS was carried out during October 2010-June 2011 and the results are based on the sample of 12,106 adults aged 18+, with results weighted to represent the U.S. adult population.
While race and Hispanic origin are separate demographic characteristics, Mintel often compares them to each other. Please note that the responses for race (white, black, Asian, Native American, or other race) will overlap those that also are Hispanic, because Hispanics can be of any race.
Abbreviations
There follows a list of abbreviations used in this report:
| CEA | Consumer Electronics Association |
| CEO | Chief Executive Officer |
| CGA | Casual Games Association |
| CPG | Consumer Packaged Goods |
| CPI | Consumer Price Index |
| DAU | Daily Active Users |
| DS | Dual Screen as in Nintendo DS portable game console |
| DVD | Digital Video Disk |
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Terms
The following terms are also used in the report:
| Android | Mobile operating system developed by Google based on Linux. |
| App | Short for application and commonly used to describe applications for mobile devices. |
| App store | A web-based storefront for downloading apps. Apple introduced its Apple iTunes App Store and has sued Amazon for infringing on the use of the term. In this report it is used to refer to any store for mobile applications, including those from Apple, Amazon, and others. |
| Broadband | A communications channel with high (or wide) bandwidth capacity that allows fast transmission of high volumes of multiple kinds of digital information simultaneously. Also known as high-speed internet. |
| Casual game | According to the CGA, casual games are “video games developed for the mass consumer,” even one who would not normally regard him or herself as a ‘gamer.’ They are easy to learn and require no previous video game skills, expertise or regular time commitment. Characteristics of casual games include games with simple rules or rules that many people are familiar with already from another format (such as card games and board games). Casual games tend to have short playing times and be inexpensive to purchase or play. |
| Freemium | A business model whereby the initial purchase (download in the case of mobile games) is free but virtual goods (avatars, levels of play, enhancements) or premium enhancements are available for a fee. |
| In-app purchases (or payments) | Purchases made through a payment system embedded within an app, typically purchases made for virtual goods or premium features. |
| In-game advertising | Advertising embedded within a game. In many cases, the ads are served into the game from an online ad server, and may be different each time the game is played. |
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In order to provide an inflation-adjusted price value for markets Mintel uses the CPI to deflate current prices. The CPI is defined as follows:
| CPI | The Consumer Price Index is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The CPI and its components are typically used to adjust other economic series for price changes and to translate these series into inflation-free dollars. Examples of series adjusted by the CPI include retail sales, hourly and weekly earnings, and components of the national income and product accounts. In addition, and in Mintel reports, the CPI is used as a deflator of the value of the consumer’s dollar to find its purchasing power. The purchasing power of the consumer's dollar measures the change in the value to the consumer of goods and services that a dollar will buy at different dates. The CPI is generally the best measure for adjusting payments to consumers when the intent is to allow consumers to purchase, at today's prices, a market basket of goods and services equivalent to one that they could purchase in an earlier period. It is also the best measure to use to translate retail sales into real or inflation-free dollars. Based on Bureau of Labor Statistics definition. |
