Gartner Says Spending on Gaming to Exceed $74 Billion in 2011

Gaming Software Spending Dominates but Online Gaming Growing Fastest Over the Next Five Years

Egham, UK, July 5, 2011— 

The gaming ecosystem is undergoing major technology and business model transitions that will last beyond 2015. Gartner, Inc. estimates that worldwide spending on the gaming ecosystem* will exceed $74 billion in 2011, up 10.4 percent from 2010 spending of $67 billion. By 2015, spending will reach $112 billion.

Overall, Gartner estimates that the gaming software component will represent $44.7 billion in 2011, and it will continue to dominate the overall gaming market in the next five years as it absorbs almost two-thirds of consumers’ gaming budgets.

“This large market size means that many consumers embrace gaming as a core piece of their entertainment budget and will continue to play as long as game publishers deliver compelling and fun games,” said Fabrizio Biscotti, research director at Gartner.

In 2011, the gaming software spending will be followed at a distance by gaming hardware and online gaming, reaching $17.8 billion and $11.9 billion, respectively (see Table 1).

Table 1: Total Gaming Market Spending, 2010-2015 (Millions of Dollars)

	2011	2013	2015
Gaming Hardware	17,797	24,621	27,354
Gaming Software	44,730	51,129	56,512
Online Gaming	11,899	21,453	28,298
Total	74,426	97,204	112,163

Source: Gartner (June 2011)

Within the gaming software market, mobile gaming will experience the largest growth opportunity with its share growing from 15 percent in 2010 to 20 percent in 2015.

“As the popularity of smartphones and tablets continues to expand, gaming will remain a key component in the use of these devices. Although they are never used primarily for gaming, mobile games are the most downloaded application category across most application stores,” said Tuong Nguyen, principal research analyst at Gartner. “For this reason, mobile gaming will continue to thrive as more consumers expand their use of new and innovative portable connected devices.”

The segment that will drive the largest revenue will come from video game consoles (hardware and software). In 2010, it generated more than two-thirds of the gaming ecosystem revenue, and Gartner predicts revenue to grow 4 percent in 2011.

Over the next five years, gaming hardware’s market share will remain constant while software spending will lose share to online-gaming spending, the fastest-growing segment. Gartner estimates consumer spending on global online gaming (subscriptions and microtransactions) will show a compound annual growth rate of 27 percent through 2015, with consumer spending on subscription fees slightly declining while spending on virtual goods will grow exponentially.

“We find that subscription fees are giving way to ‘freemium’ models, in which the game is provided for free to gamers but is monetized through advertising (both in-game advertising and display advertising) and in-game microtransactions, such as the sale of value-added services or virtual-good purchases,” said Brian Blau, research director at Gartner. “This trend is prevailing given the rise of social gaming, in which online gaming is connected to social networking sites and social networking platforms.”

“Users have become multichannel-oriented by choice and expect vendors to continue to deliver quality content and experiences by extending their gaming possibilities across multiple platforms,” said Mr. Blau. “If today’s mobile technology does not evolve quickly enough, the gaming industry is set to see the rate of innovation severely decline. Alternatively, it will provide opportunities in technology and content genres that we can’t foresee today.”

Additional information is available in the Gartner report “Market Trends: Gaming Ecosystem, 2011″ at http://www.gartner.com/resId=1724014.

Sony has officially dropped the suggested retail price of the PSP in Europe to €129.99 ($187.29). This follows the company’s February 25th announcement that it was slashing the price of its gaming system to $129.99 in the United States. Sony also said that — beginning on April 14th — PSP owners will be able to access an unlimited cloud-based music service called Music Unlimited. Powered by Qriocity, Music Unlimited will allow PSP owners to listen to customized music channels or sync up with tunes stored on their PlayStation 3, PC, or other Sony devices. “The price cut is aimed at increasing adoption of the player in Europe,” said Sony spokesperson Satoshi Fukuoka. The move may also be tied to the recent launch of the Nintendo 3DS, which we reviewed earlier this month.

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Neither major announcement comes as much of a surprise, but Sony on Thursday unveiled its portable gaming strategy moving forward. Two key pieces of Sony’s mobile gaming future were finally made official: the company’s next-generation PSP, known for now as “NGP” or Next Generation Portable, and its cross-platform mobile gaming framework dubbed PlayStation Suite. The former features a 5-inch, 960 x 544-pixel OLED touchscreen display, two analog controllers, two touchpad control surfaces, two cameras, an electronic compass, GPS, Wi-Fi, integrated 3G connectivity and a quad-core processor. The handheld will launch this holiday season and it also features compatibility with the latter, Sony’s PlayStation Suite, which means a consistent experience across Sony’s upcoming new portable and compatible smartphones will be possible.

PlayStation Suite will consist of a mobile gaming platform and a store. Initially, the Suite will include an emulator that will allow first-generation PlayStation games to be played on Android devices, but an Android game store and  new development platform are in the works. The offering will require Android 2.3 Gingerbread or later, and it will feature on-screen controls for devices that aren’t fortunate enough to include dedicated gaming controls like the upcoming Sony Ericsson Xperia Play, which was not announced at Thursday’s event. Hit the break for Sony’s full press releases pertaining to PlayStation Suite and the NGP.

SONY COMPUTER ENTERTAINMENT TO UNVEIL “PLAYSTATION®SUITE,” DELIVERING THE WORLD OF PLAYSTATION® TO ANDROID™ BASED PORTABLE DEVICES

Simultaneously Launching “PlayStation®Certified” License Program to Provide PlayStation® Content and Development Support for Android™ Based Portable Devices

Tokyo, January 27, 2011– Sony Computer Entertainment Inc. (SCE) today unveiled “PlayStation®Suite” (PS Suite), delivering the PlayStation® experience to Android™ based portable devices*1. Through this entirely new initiative, users will be able to enjoy PlayStation content on an open operating system for the first time in PlayStation history. In the dramatically evolving and diversifying mobile market, the number of users who enjoy games casually on a variety of devices including mobile phones, smart-phones and tablet PCs, has been increasing significantly. By offering “PlayStation quality” content to this rapidly growing market, SCE will not only deliver the PlayStation experience to a wider base of users around the globe, but will also be able to offer game developers and publishers the potential to further expand their business opportunities to these devices.

In providing the PlayStation experience on Android based portable devices, SCE will commence a “PlayStation®Certified” license program for hardware manufacturers. Through this program, SCE will offer necessary support, including development support as well as logo licensing, to ensure the delivery of PlayStation quality experience across various devices.

On the software front, SCE plans to provide PS Suite content within this calendar year, starting with original PlayStation games*2 (PS one® classics) that will allow users to enjoy “PlayStation quality” gameplay on their Android based portable devices. SCE also plans to open PlayStation®Store where users will be able to download content in an easy to use environment, directly via the Android based portable devices. Moreover, SCE will provide a new game development environment in an effort to ensure new and compelling content is delivered on PS Suite, which will also offer opportunities for a wider base of developers and publishers to further expand their business on various portable devices.

Newly developed content for PS Suite can also be enjoyed on the next generation portable entertainment system (codename: NGP), which SCE announced today. Users who have never experienced PlayStation content can get a taste of the PlayStation experience through PS Suite and from there, they can enjoy the ultimate portable entertainment experience that is only possible on NGP.

SCE will vigorously enhance the entertainment world delivering the PlayStation experience to a wider base of users.

*1 Android™ 2.3 or beyond is required.
*2 PS one game console software title. We will announce the tiles when ready.

SONY COMPUTER ENTERTAINMENT ANNOUNCES ITS NEXT GENERATION PORTABLE ENTERTAINMENT SYSTEM

Ultimate Portable Entertainment System Makes Its Debut This Year, Further Expanding the PlayStation® Business in the Portable Gaming Market

Tokyo, January 27, 2011– Sony Computer Entertainment Inc. (SCE) today announced its next generation portable entertainment system (codename: NGP), which delivers the ultimate portable entertainment experience. NGP will make its debut at the end of the year 2011.

NGP is designed to offer unparalleled interactive entertainment that is only possible on PlayStation®. This new system offers a revolutionary combination of rich gaming and social connectivity within a real world context, made possible by leveraging SCE’s experience from both PSP® (PlayStation®Portable) and PlayStation®3 (PS3®) entertainment systems.

Deep and immersive gaming is at the core of PlayStation’s DNA, and NGP is the latest embodiment of this vision. By having both Wi-Fi and 3G network connectivity, together with various applications, NGP will enable infinite possibilities for users to “encounter,” “connect,” “discover,” “share” and “play” with friends wherever they are. Within the device are a range of features that provide a genuinely cutting-edge, next generation ultimate portable entertainment experience.
・Stunning OLED and Revolutionary User Interface

NGP incorporates a beautiful multi-touch 5-inch organic light emitting display (OLED) as the front display. A high-performance CPU / GPU combined with OLED enables rich, visually striking graphics never seen before on a portable entertainment system, for both games and other digital entertainment content. The new system also incorporates a unique multi-touch pad on the rear, and together with the front touch display, NGP offers new game play allowing users to interact directly with games in three dimension-like motion, through “touch, grab, trace, push and pull” moves of the fingers.
・Super Oval Design and Dual Analog Sticks

While succeeding the basic design philosophy of PSP, NGP adopts the Super Oval Design form factor, created to fit comfortably in users’ hands. For the first time, a portable entertainment system will feature two analog sticks, which enable a wider range of game genres to be brought into the portable experience.
・LiveArea™

Every game title for NGP will be provided with a space called “LiveArea™” where users can share the fun and excitement with other players. Users will have access to the latest information of games provided from SCE and 3rd party developers and publishers through PlayStation®Network. Additionally, NGP users will be able to view an “Activity” log that is constantly updated with accomplishments from users who are playing the same game, which in turn can trigger active real-time communication among users.
・Near

SCE will also provide location-based services on NGP as part of the basic features utilizing PlayStation Network. The new application called “Near,” developed specifically for this service and the network, will be pre-installed in the system to let users find out what their friends in the vicinity are playing now or what they were playing recently. Users can meet their friends and new players virtually, regardless of what games they are playing, simply by sharing their game information across different dimensions of time and distance.
・New Game Medium

NGP adopts a new game medium, a small flash memory based card, dedicated for NGP software titles. Taking advantage of the flash memory feature, this innovative card can store the full software titles plus add-on game content or the game save data directly on to the card. By adopting flash memory based card, SCE will be able to provide game cards with higher capacity in the future, allowing developers to store more game data to deliver rich and immersive games.

NGP will also come equipped with two cameras on its front and rear, as well as three motion sensors, gyroscope, accelerometer and electronic compass, all of which are designed to enable users to enjoy the world of entertainment that is linked with real life experiences.

PlayStation®Suite (PS Suite), announced today, will also closely coordinate with NGP. The newly developed and released game content for Android™ based portable devices can also be enjoyed on NGP. As a result, users will have access to not only the most leading-edge content, but also some of the more casual experiences that typify the mobile market place.

SCE will vigorously promote NGP towards the launch as the next generation portable entertainment platform and deploy various measures to further expand the portable gaming market.

Mirroring a Bloomberg report, which mirrored an MCV report, which mirrored earlier rumors, Reuters now reports that Sony plans to unveil its next-generation PlayStation Portable gaming device at an event on January 27th. The event, which will take place in Japan on Thursday, falls on the same day Nintendo is expected to report a 40% slide in its quarterly profits. Reuters reiterates that Sony’s new portable gaming device will feature a touchscreen display and integrated 3G connectivity. Reuters also notes that Sony’s PlayStation phone could be announced at the same event, though the electronics company mat opt to announce the smartphone next month ahead of Mobile World Congress. Earlier reports suggest that Sony’s gaming phone will launch as the Xperia Play, and will feature a PlayStation-branded gaming experienced built atop the Android 2.3 Gingerbread platform.

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Sony is reportedly considering (yet again) the development of a new hybrid device that will combine the gaming features of its popular PlayStation portable gaming device with the functionality of a Sony Ericsson mobile phone. According to Nikkei Daily, the quintessential PlayStation phone will be developed by a new project team to be assembled in July. Rumors of a “PlayStation phone” have come and gone for more than two years now… Maybe Sony is so tired of hearing them that it will finally churn out a PS phone to shut everyone up.

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With the E3 expo coming up in June, rumors of a refreshed PSP are surging once again. Now billed as yet another “iPhone killer”, chatter surrounding the possibility of a new PSP is reportedly firming up a bit with inside sources seemingly becoming more lose lipped lately. Current status of rumors: slider form factor,  touchscreen, two analog thumbsticks in addition to standard controls, “far more similar to the iPhone than the current device” (whatever that means) and a release scheduled before Christmas 2009. No, it certainly won’t look like the sweet mock up above but the more rumors that get pumped into the mill lately, the more they’ve been lining up on common ground. Sony can definitely use the buzz a device like this would create, that’s for sure.

[Via Kotaku]

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Gamers feast your eyes! We’re a few short days away from the official launch of the renovated PSP-3000 and the first unboxing images are upon us. We already know that the blazing new screen is tremendously better than the current model and now we know what the initial retail package has in store for us. The bundle shown above will ship complete with a 1 GB Memory Stick Pro Duo card, Ratchet and Clank: Size Matters and a copy of National Treasure 2: Book of Secrets. There is also an Entertainment bundle expected in November followed by the lone model which will be available sometime later this year with $30 shaved from the $199 bundle prices. Let’s all hope that the battery on this puppy is indeed no worse than the current model as Sony claims.

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Hot off the press in China, a few pictures are currently working their way west that supposedly depict what will eventually be a new PlayStation Portable. There hasn’t been a huge amount of information about Sony’s upcoming third generation PSP, but these pics are actually pretty telling. Apart from the fact that the unit pictured is silver and pretty damn sexy, the top picture is of particular interest. To the left of the volume buttons is a restyled home button with the PlayStation logo on it. More interesting however, is what appears to be a built in microphone opening to the right of the volume buttons. Skype calls? Yes please. In-game audio chat? Sounds like a plan. The PSP 3000 case is also reportedly a bit thinner than the current model and includes some more restyled controls beyond the home key. According to the original source of the pics, Sony already has the new PSP in production and is shooting for a holiday release this year. Sony hasn’t commented yet and we’re pretty sure it won’t respond to leak-related inquiries. All the same, if we are looking at a holiday release then an official announcement should be coming up pretty soon.

[Via Electronista]

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