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The Business of Computer and Video Games
DFC Intelligence, March 2004, Pages: 590
The Business of Computer and Video Games 2004 is based on a review of historical trends and opinions of leading members of the video game industry, including analysts, consultants, developers, publishers, retailers and consumers. This report has been prepared by utilizing a variety of primary and secondary research techniques including: telephone and personal interviews; analysis of market surveys, trade journals and company literature; extensive database searches; and our original compilations and analysis.
The Business of Computer and Video Games report is more than a collection of raw statistics. We carefully scrutinize and analyze data from a variety of sources. The result is a comprehensive overview that puts facts and figures in context. Anyone who has attempted to collect figures for the game industry knows that is difficult to obtain accurate statistics. We have studied market surveys, investment analyst reports and other sources of industry information. Our statistics and forecasts are based on the careful analysis of the available research, a great deal of which is contradictory. In many cases, we made assumptions based on the best available information. We feel our figures accurately reflect past and future market conditions. At the very least, these numbers track the industry trends and accurately estimate the market share of the various players.
A major challenge in analyzing the interactive entertainment market is imperfect data. There are several services that track software sales for individual markets around the world. These include the NPD Group/NPD Funworld/TRSTS service that tracks U.S. sales (in February 2004 they started covering Canada), NPD Techworld (PC Data) for PC game sales, ELSPA/Chart-Track for the U.K., AC Nielsen Canada, Media Control and GfK in Europe. Japan data is available from several services including Media Create and the magazines Famitsu and Dengeki (owned by Kadokawa Shoten).
The problem in tracking the market on a worldwide basis is that the retail tracking services focus on individual markets and are only obtaining samples from a portion of each market they cover. Thus the services are best used for tracking how well a given title is doing in a given market compared to other titles in that market. Extrapolating retail sales data to obtain an overall market figure is never 100% accurate and always subject to debate. The author has looked at reported sales data for different markets and compared that to with reported sales from individual companies based on talking to company executives and looking at relevant investment information including SEC filings. The end result are numbers that we feel give a fairly accurate picture of trends in the interactive entertainment industry. However, we caution users that actual results may vary. In addition, fluctuations in exchange rates can affect overall results on a
worldwide basis.
This report is divided into six sections. Part I is an executive summary with key bullet point highlights from throughout the report. Part II provides a history of the interactive entertainment industry from its early days in the 1970s. This section includes a detailed look at the events of the past three years. Part III looks at video game and PC game hardware and includes a discussion of the major platforms. Part IV is a look at video game software, game genres and the demographics of consumers that play games. Part V is an in-depth look at how the industry works from development through retail distribution and marketing. The report concludes with part VI, a more subjective discussion of major trends affecting the interactive entertainment industry, including consolidation, licensing of Hollywood properties and digital distribution.
There is also a comparison between the interactive entertainment business and the music and movie business. This report can be supplemented by other reports focusing on narrower aspects of the industry including Worldwide Forecasts for the Video Game and Interactive Entertainment Industry, The Online Game Market, Market Leaders in the Video Game and Interactive Entertainment Industry and The State of Game Technology.
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