IBISWorld Reports on the Games Industry

No Comment 24 Views

It’s fairly lengthy and I wouldn’t advise you read it really as it’s not extremely insightful except for maybe their forecast of the future. But here are some highlights from the IBISWorld Inc games industry report.

STATISTICS 2009
Revenue $41,323 Million
Number of Enterprises 5,557
Forecast Revenue Growth to 2013 9.8%
Forecast GDP Growth to 2013 1.3%
Recent Employment Growth 7.6%
Average Wages per Employee $45,248
Average Profit Margin 6.0%
Average Revenue of Enterprise $7,436,176
Imports Share of Domestic Demand N/A%
Exports Share of Revenue N/A%

KEY FACTS
Competition in this industry is high
Volatility medium (revenue fluctuations between 3 and 10
points.)
The life cycle stage is growth
The top 5 players account for 79% of industry revenue:
- Sony Corporation of America 24.6%
- GameStop Corp. 20.4%
- Nintendo Co., Ltd. 13.0%
- Microsoft Corporation 12.4%
- Electronic Arts Inc. 9.4%

I’m not exactly sure how they put Sony on top in terms of revenue when in regards to console sales they’re third. I wonder if that’s including Blu-Ray sales or something as well.

Industry Outlook

IBISWorld forecasts that this industry will grow at an average annual rate of 9.8% during the five year period to 2013. The year 2007 saw a record number of gaming consoles sold, record levels of revenue from retail games, a new console with previously unseen capacity for new accessory sales, and a rising segment in online gaming that is generating astonishing growth. The future for this industry is expected to remain bright despite the recession conditions, as the industry has historically proven itself to be resistant to economic downturns. The primary force behind this growth is the unwillingness of older gamers to stop playing. The myth that video games are only for the young has been well and truly debunked - research conducted in 2007 found that the average age of a game player in the US is 35 years.

One area that is expected to grow strongly over the outlook period is games targeted at women. The stunning success of the Wii, particularly among women, suggests that games more specifically targeted to women will grow this segment further, adding even more to overall growth. The industry is expected to become increasing profitable, as the delivery of services shifts online. As the quality of game systems improves, the second hand game market is forecast to grow. As the most profitable segment in the industry it is forecast to grow strongly over the five years to 2013.

Here is my favorite part of their industry review:

THREATS - Competition
The level of competition experienced by industry establishments is high and steady. The big fight in the industry is between Sony, Microsoft, and the resurgent challenger, Nintendo. Sales of consoles are fiercely fought over, in the knowledge that every console purchase represents a near-guarantee of future game sales. Attaining a competitive advantage in this all-important battle for gamers’ hearts and minds is dependent upon successfully combining the myriad factors that affect a customer’s choice.

The hearts and minds of gamers are not for sale. And Nintendo is resurgent? Yeah, they haven’t been selling tons of Zelda and Mario games for decades or anything. Sure their previous consoles haven’t seen the same success of the Wii aside from perhaps the NES and maybe SNES but the DS has been the top handheld console for a long, long time.

The language of the report struck me as odd over all. Plus they quote a lot of numbers from 2007 but fail to talk about 2008 for the most part. With a quarter of 2009 already in the books I’m sure they could have pulled together numbers from last year by now...

In : PC

About the author

Leave a Reply

Your email address will not be published. Required fields are marked (required)

What is 3 + 10 ?
Please leave these two fields as-is:
IMPORTANT! To be able to proceed, you need to solve the following simple math.
Trending Now