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Video Games and Consoles - UK - October 2010

The video game industry has found it hard to replicate the extremely strong performance seen in 2008. The recession saw consumers tightening their belts and cutting back on discretionary spend, while the current generation of consoles are reaching maturity, making it harder to draw new gamers into the market.

  • The gaming demographic has broadened, but there is still a gulf between what new and traditional gamers are looking for. Online gaming has little appeal for women and older gamers, and remains the preserve of younger men.
  • Developers and publishers need to be wary of the amount of violence in their games if they want to maximise appeal. Women are particularly likely to be put off by overly gory games.
  • For most people, consoles are still something for playing games on - it's only among the enthusiasts that media features and other non-core services become particularly important.
  • The difficult economic environment will mean that the next few years will be tough for anyone of working age. Bringing in older games and appealing to grandparents could minimise the impact of the post-recession austerity.
  • Digital distribution will totally change the shape of the gaming industry - the question is 'when', rather than 'if'. Already, a third of Xbox 360 and PS3 owners have paid to download a game.
  • Mintel's consumer research confirms that motion-based controllers appeal more to the mass-market than to committed gamers. The combination of the power of the PS3 and Xbox 360 and the precision of PS Move and Kinect could help counteract this limited appeal.

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Table of contents

  1. Issues in the Market

      • Main issues
        • Abbreviations
        • Future Opportunities

          • Growing a longer tail
            • Life as science fiction
            • Market in Brief

              • Gaming a truly mainstream pastime now…
                • Figure 1: Type of video game console owned, May 2010
              • … but sales fall sharply in 2009
                • Figure 2: Video game and console market size, 2006-10
              • Wii continues its dominance of the nation’s living rooms…
                • Figure 3: Video game consoles owned for personal use and when bought, May 2010
              • … but can new controllers break its dominance of the casual market?
                • The battle for second hand sales
                  • How much of a threat are mobile phones?
                    • Figure 4: Attitudes towards portable consoles, by ownership, May 2010
                  • Media features are important – but mainly to the gaming hardcore
                    • Figure 5: Activities using games console(s) in the last 12 months, May 2010
                • Internal Market Environment

                  • Key points
                    • A new gaming boom…
                      • Figure 6: Have console in home, 2006-09
                      • Figure 7: Bought console in last 12 months, 2006-09
                    • … and software sales follow suit
                      • Figure 8: Bought games in last 12 months, 2004-09
                    • Changing main user hints at the new gaming mentality
                      • Figure 9: Main user of games, 2006-09
                    • Will a new audience extend a console’s lifecycle?
                      • Piracy levels differ hugely between platforms
                        • Turning to the courts
                          • New channels can help combat copyright infringement
                            • Moving to a network-based model
                              • Second-hand sales…
                                • … and “Project Ten Dollar”
                                  • Charging for what was once free?
                                    • Benefits go beyond encouraging exercise…
                                      • … but there are still concerns over the impact of violent games
                                        • Hostile media heightens fears
                                          • The impact of mobile devices
                                          • Broader Market Environment

                                            • Key points
                                              • A long, slow recovery…
                                                • Figure 10: GDP, PDI, consumer expenditure and savings, at current prices, 2005-15
                                              • … hitting the casual market…
                                                • … and changing purchasing patterns
                                                  • Publishers need to reflect changing age structure
                                                    • Figure 11: Trends in the age structure of the UK population, 2005-15
                                                  • Sidestepping the spending cuts by appealing to new demographics
                                                    • Figure 12: Forecast adult population trends, by lifestage, 2005-15
                                                  • Growth of broadband drives the move to downloadable content
                                                    • Figure 13: Broadband penetration, by demographics, 2004-09
                                                  • A contributor to childhood obesity…
                                                    • Figure 14: Proportion of children in England aged 2-15 who are overweight or obese, by gender, 1995-2008
                                                    • Figure 15: Assessment of who/what is responsible for children becoming overweight or obese, May 2010
                                                  • … or a solution?
                                                  • Competitive Context

                                                    • Key points
                                                      • Out-of-home leisure dominates
                                                        • Figure 16: Frequency of taking part in leisure activities in free time on weekdays and weekends: Family lifestage vs all adults, September 2009
                                                    • Strengths and Weaknesses

                                                        • Figure 17: Video games market – SWOT analysis, 2010
                                                    • Who’s Innovating?

                                                      • Key points
                                                        • Kinect and Move aim to reposition the 360 and PS3
                                                          • Kinect – potentially revolutionary?
                                                            • Move adds additional precision to motion-based gaming
                                                              • The DS goes 3D…
                                                                • … as does the PS3
                                                                  • Microsoft looks for cross-platform capabilities
                                                                  • Market Size and Forecast

                                                                    • Key points
                                                                      • Another tough year in 2010
                                                                        • Figure 18: Video game and console market size, 2006-10
                                                                      • Software growing in importance
                                                                        • Figure 19: Hardware/software split in the video game and console market, 2006-10
                                                                    • Market Share

                                                                      • Key points
                                                                        • The Wii continues to thrive
                                                                          • Figure 20: Video game consoles owned for personal use and when bought, May 2010
                                                                      • Companies and Products

                                                                        • Major players
                                                                          • Nintendo of Europe
                                                                              • Figure 21: Nintendo Co Ltd consolidated results, 2009-10
                                                                            • Sony Computer Entertainment
                                                                                • Figure 22: Sony Computer Entertainment UK results, 2008-09
                                                                              • Microsoft
                                                                                  • Figure 23: Microsoft Entertainment and Devices Division consolidated results, 2008-09
                                                                                  • Figure 24: Microsoft Entertainment and Devices Division consolidated interim results, 2009-10
                                                                                • Alienware
                                                                                    • Figure 25: Dell Inc consolidated results, 2009-10
                                                                                    • Figure 26: Dell Inc consolidated results, Q1 FY2010-11
                                                                                  • Electronic Arts
                                                                                      • Figure 27: Electronic Arts Limited UK results, 2008-09
                                                                                    • Activision Blizzard
                                                                                        • Figure 28: Activision Blizzard Inc consolidated results, 2008-09
                                                                                        • Figure 29: Activision Blizzard Inc consolidated results, Q1 FY2009-10
                                                                                      • Game Group
                                                                                        • Figure 30: Game Group Plc UK & Ireland store portfolio, 2009-10
                                                                                        • Figure 31: Game Group Plc consolidated results, 2009-10
                                                                                    • Brand Elements

                                                                                        • Key points
                                                                                          • Brand map
                                                                                              • Figure 32: Attitudes towards and usage of video game console brands, June 2010
                                                                                            • Brand qualities of video games console brands
                                                                                              • Wii rules the roost, but Xbox 360, PS3 best for performance
                                                                                                • Figure 33: Personalities of various video games console brands, June 2010
                                                                                              • Experience of video games console brands
                                                                                                • Wii most used, Sony brands least so
                                                                                                  • Figure 34: Consumer usage of various video games console brands, June 2010
                                                                                                • Brand consideration for video games console brands
                                                                                                  • Wii and PS3 most considered
                                                                                                    • Figure 35: Consideration of various video games console brands, June 2010
                                                                                                  • Brand satisfaction for video games console brands
                                                                                                    • Performance PS3 marginally most excellent, PSP lags behind
                                                                                                      • Figure 36: Satisfaction with various video games console brands, June 2010
                                                                                                    • Brand commitment to video games console brands
                                                                                                      • Wii has highest loyalty, PSP loses users
                                                                                                        • Figure 37: Commitment to various video games console brands, June 2010
                                                                                                      • Brand intentions for video games console brands
                                                                                                        • Wii and PS3 outdo Xbox 360
                                                                                                          • Figure 38: Future usage intentions for various video games console brands, June 2010
                                                                                                        • Brand recommendation for video games console brands
                                                                                                          • Handhelds less recommended
                                                                                                            • Figure 39: Recommendation of various video games console brands, June 2010
                                                                                                          • Xbox 360
                                                                                                            • What the consumer thinks
                                                                                                              • Figure 40: Attitudes towards the Xbox 360 brand, June 2010
                                                                                                            • PSP (PlayStation Portable)
                                                                                                              • What the consumer thinks
                                                                                                                • Figure 41: Attitudes towards the PSP (PlayStation Portable) brand, June 2010
                                                                                                              • Nintendo DS
                                                                                                                • What the consumer thinks
                                                                                                                  • Figure 42: Attitudes towards the Nintendo DS brand, June 2010
                                                                                                                • PS3 (PlayStation 3)
                                                                                                                  • What the consumer thinks
                                                                                                                    • Figure 43: Attitudes towards the PS3 (PlayStation 3) brand, June 2010
                                                                                                                  • Wii
                                                                                                                    • What the consumer thinks
                                                                                                                      • Figure 44: Attitudes towards the Wii brand, June 2010
                                                                                                                  • Brand Communication and Promotion

                                                                                                                    • Key points
                                                                                                                      • Adspend predictable – and slowly nudging upwards
                                                                                                                        • Figure 45: Video game adspend, by quarter, 2005-10
                                                                                                                      • Mass market product, mass market media
                                                                                                                        • Figure 46: Video game adspend, by media type, 2010
                                                                                                                      • Nintendo spends three times as much as its nearest rival
                                                                                                                        • Figure 47: Video games adspend, 2009-10
                                                                                                                      • Leading with the console, or with the games?
                                                                                                                      • Channels to Market

                                                                                                                        • Key points
                                                                                                                          • The rise and rise of digital distribution
                                                                                                                            • Valve dominates the PC download market
                                                                                                                              • Consoles increasing the revenue generated online
                                                                                                                                • The boxed/download interface
                                                                                                                                  • The high street specialists are under pressure
                                                                                                                                  • Console Ownership

                                                                                                                                    • Key points
                                                                                                                                      • Static consoles still lead the way
                                                                                                                                        • Figure 48: Type of video game console owned, May 2010
                                                                                                                                        • Figure 49: Type of video game console owned, by gender, age and socio-economic group, May 2010
                                                                                                                                      • Nintendo’s wooing of the casual gamer reaps rewards
                                                                                                                                        • Figure 50: Video game consoles owned for personal use and when bought, May 2010
                                                                                                                                      • The difference between ‘must-have’ and ‘nice-to-have’…
                                                                                                                                        • … and the scope for cross-marketing
                                                                                                                                        • Gaming on the Move

                                                                                                                                          • Key points
                                                                                                                                            • The rise of the mobile phone gamer
                                                                                                                                              • Figure 51: Attitudes towards portable consoles, by ownership, May 2010
                                                                                                                                            • Younger people going mobile
                                                                                                                                              • Figure 52: Selected attitudes towards portable consoles, by age, May 2010
                                                                                                                                          • Game and Console Buying Behaviour

                                                                                                                                            • Key points
                                                                                                                                              • Console buying
                                                                                                                                                • A hunt for value – but people still prefer to buy new
                                                                                                                                                  • Figure 53: Attitudes towards brand of static or portable console, May 2010
                                                                                                                                                • It’s not all about the machine
                                                                                                                                                  • Careful shoppers, or creatures of habit?
                                                                                                                                                    • Game purchasing
                                                                                                                                                      • Signs of a price-conscious consumer…
                                                                                                                                                        • Figure 54: Statements on buying games for a console, May 2010
                                                                                                                                                      • … and it’s still a market that’s driven by offline play
                                                                                                                                                        • Blood and guts a turn-off for non-traditional segments
                                                                                                                                                        • Console Use

                                                                                                                                                          • Key points
                                                                                                                                                            • Games still dominate usage…
                                                                                                                                                              • Figure 55: Activities using games console(s) in the last 12 months, May 2010
                                                                                                                                                            • … but a third are starting to take advantage of new possibilities
                                                                                                                                                              • Figure 56: Repertoire of activities using games console(s) in the last 12 months, May 2010
                                                                                                                                                              • Figure 57: Activities using games console(s) in the last 12 months, by repertoire of activities using games console(s) in the last 12 months, May 2010
                                                                                                                                                            • PS3 gets closer to becoming a media hub
                                                                                                                                                              • Figure 58: Activities using games console(s) in the last 12 months among static console owners, May 2010
                                                                                                                                                            • Microsoft and Sony driving digital distribution…
                                                                                                                                                              • … making the Wii even more important to high street retailers
                                                                                                                                                              • Key Product Features

                                                                                                                                                                • Key points
                                                                                                                                                                  • Getting the basics right
                                                                                                                                                                    • Figure 59: Hardware features influencing purchase of a static games console, May 2010
                                                                                                                                                                  • Demanding? Or “that will do”?
                                                                                                                                                                    • Figure 60: Number of hardware features influencing purchase of a static games console, May 2010
                                                                                                                                                                  • The hardcore are looking for media features
                                                                                                                                                                    • Figure 61: Hardware features influencing purchase of a static games console, by repertoire of hardware features influencing purchase of a static games console, May 2010
                                                                                                                                                                  • What does the split mean for the Kinect?
                                                                                                                                                                    • Online gaming still most attractive to the gaming stalwarts
                                                                                                                                                                    • Appendix – Console Ownership

                                                                                                                                                                        • Figure 62: Most common console ownership, by demographics, May 2010
                                                                                                                                                                        • Figure 63: Next most common console ownership, by demographics
                                                                                                                                                                        • Figure 64: Type of console owned, by demographics, May 2010
                                                                                                                                                                        • Figure 65: Video game consoles owned for personal use and bought between 1 and 2 years ago, by demographics, May 2010
                                                                                                                                                                        • Figure 66: Video game consoles owned for personal use and bought between 2 and 4 years ago, by demographics, May 2010
                                                                                                                                                                        • Figure 67: Video game consoles owned for personal use and bought more than four years ago, by demographics, May 2010
                                                                                                                                                                    • Appendix – Game and Console Buying Behaviour

                                                                                                                                                                        • Figure 68: Most popular attitudes towards brand of static or portable console (any agree), by demographics, May 2010
                                                                                                                                                                        • Figure 69: Next most popular attitudes towards brand of static or portable console (any agree), by demographics, May 2010
                                                                                                                                                                        • Figure 70: Most popular attitudes towards brand of static or portable console (any disagree), by demographics, May 2010
                                                                                                                                                                        • Figure 71: Next most popular attitudes towards brand of static or portable console (any disagree), by demographics, May 2010
                                                                                                                                                                        • Figure 72: Most popular statements on buying games for a console, by demographics, May 2010
                                                                                                                                                                        • Figure 73: Next most popular statements on buying games for a console, by demographics, May 2010
                                                                                                                                                                    • Appendix – Key Product Features

                                                                                                                                                                        • Figure 74: Most popular hardware features influencing purchase of a static games console, by demographics, May 2010
                                                                                                                                                                        • Figure 75: Next most popular hardware features influencing purchase of a static games console, by demographics, May 2010
                                                                                                                                                                    • Appendix – Gaming on the Move

                                                                                                                                                                        • Figure 76: Most popular attitudes towards portable consoles, by demographics, May 2010
                                                                                                                                                                        • Figure 77: Next most popular attitudes towards portable consoles, by demographics, May 2010
                                                                                                                                                                    • Appendix – Console Use

                                                                                                                                                                        • Figure 78: Activities using games console(s) in the last 12 months, by demographics, May 2010
                                                                                                                                                                        • Figure 79: Activities using games console(s) in the last 12 months, by demographics, May 2010

                                                                                                                                                                    Companies Covered

                                                                                                                                                                    • Activision Blizzard, Inc.
                                                                                                                                                                    • Argos
                                                                                                                                                                    • Asda Group Ltd
                                                                                                                                                                    • Blockbuster Entertainment Ltd (UK)
                                                                                                                                                                    • British Market Research Bureau (BMRB)
                                                                                                                                                                    • Codemasters (UK)
                                                                                                                                                                    • Dell Inc.
                                                                                                                                                                    • Department of Health
                                                                                                                                                                    • Electronic Arts Limited UK
                                                                                                                                                                    • Facebook, Inc.
                                                                                                                                                                    • Game Group
                                                                                                                                                                    • Google UK
                                                                                                                                                                    • Government Actuary's Department (GAD)
                                                                                                                                                                    • HMV Retail Ltd
                                                                                                                                                                    • Kantar Media
                                                                                                                                                                    • LOVEFiLM International Ltd
                                                                                                                                                                    • Microsoft Ltd (UK)
                                                                                                                                                                    • MySpace.com
                                                                                                                                                                    • Netflix, Inc.
                                                                                                                                                                    • Nintendo UK Entertainment Ltd
                                                                                                                                                                    • Rockstar Games Inc
                                                                                                                                                                    • Sega Europe
                                                                                                                                                                    • Sony Computer Entertainment Europe
                                                                                                                                                                    • Tesco Plc

                                                                                                                                                                    Video Games and Consoles - UK - October 2010

                                                                                                                                                                    £1,995.00 (Excl.Tax)