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Video Games and Consoles - UK - October 2012

“The Nintendo Wii U is in a potentially weak position, attempting with the Pro Controller to appeal to more traditional gamers who are likely to already have an affinity to Microsoft or Sony's consoles, whilst simultaneously attempting to convince those gamers who enjoyed the initial Nintendo Wii that this updated version, with an entirely new control system, is just as worthy of their attention.”

– Samuel Gee, Technology Analyst

Some questions answered in this report include:

  • How substantial a threat are casual games to portable and static consoles?
  • Will downloadable content replace boxed discs in 2013?
  • How successful is the next iteration of the Nintendo Wii likely to be?
  • Are consumers likely to embrace consoles as entertainment hubs?

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Table of contents

  1. Introduction

      • Definitions
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Forecast value of games console and games software sales, 2007-17
            • Market factors
              • PlayStation 3 and Xbox 360 sales stay steady
                • Portable consoles struggle to appeal to consumers
                  • Independents try to replicate indie gaming success with the OUYA
                    • Companies, brands and innovation
                      • Figure 2: Total volume console sales, by brand, 2011 and lifetime
                      • Figure 3: Volume sales of the ten bestselling games* in the EMEAA region, by publisher, 2011
                    • The consumer
                      • Figure 4: Console and accessory ownership, July 2012
                      • Figure 5: Hours spent playing games on consoles, July 2012
                      • Figure 6: Games that consumers play, July 2012
                      • Figure 7: Accessory ownership, July 2012
                      • Figure 8: Attitudes towards casual games, July 2012
                      • Figure 9: Attitudes towards using a games console as an entertainment hub, July 2012
                    • What we think
                    • Issues in the Market

                        • How substantial a threat are casual games to portable and static consoles?
                          • Will downloadable content replace boxed discs in 2013?
                            • How successful is the next iteration of the Nintendo Wii likely to be?
                              • Are consumers likely to embrace consoles as entertainment hubs?
                              • Trend Applications

                                  • Trend: Extend My Brand
                                    • Trend: Switch Off
                                      • 2015 trend: Old Gold
                                      • Market Drivers

                                        • Key points
                                          • Console ownership increases minutely year on year
                                            • Figure 10: Ownership of fixed or portable consoles in the home, 2008-12
                                          • PlayStation 2 and 3 finally reach parity as Wii penetration continues to rise
                                            • Figure 11: Fixed and portable console ownership, 2008-12
                                          • Number of consumers purchasing a console falls
                                            • Figure 12: Percentage of consumers that have purchased a console in the last 12 months, 2010-12
                                            • Figure 13: Percentage of consumers who have purchased a console in the last 12 months, by purchased console, 2008-12
                                          • Expensive dedicated portable consoles sell slowly
                                            • Figure 14: Total known lifetime sales of the Nintendo 3DS and PlayStation Vita, to September 2012
                                          • Nintendo looks to retain traditional player base with Wii U Pro
                                            • Independents try to replicate indie gaming success with the OUYA
                                              • More stringent digital rights and used game management systems may come to consoles
                                                  • Figure 15: Proportion of GAME group video game volume sales attributable to pre-owned copies in the first six months of each year, 2008-11
                                                • SmartGlass heralds the beginning of the battle for the console-dependent living room
                                                  • ‘Home-grown’ secondary digital services are starting to appear
                                                    • Figure 16: Number of BBC iPlayer requests from cable, mobile, tablets and games consoles, July 2009-March 2012
                                                  • Further controversy prompts PEGI to enshrine ratings in law
                                                    • Figure 17: The top ten bestselling console games in the UK, 2011
                                                • Competitive Context

                                                  • Key points
                                                    • PC gaming becomes increasingly convenient and cloud-based with Steam and Origin
                                                      • Mobile application gaming increases
                                                          • Figure 18: The maximum amount consumers are willing to spend on mobile games, January 2012
                                                        • Core Online model can be streamed to any browser
                                                        • Who’s Innovating?

                                                          • Key points
                                                            • Oculus Rift headset takes another stab at 3D virtual reality
                                                              • PlayStation Wonderbook attempts to tap the young child market with augmented reality
                                                                • Dear Esther provides a counterpoint to popular first-person shooters
                                                                  • Sound Shapes explores dynamic level generation through music
                                                                  • Market Size and Forecast

                                                                    • Key points
                                                                      • Market close to cyclical move back to positive growth
                                                                        • Figure 19: Value of games console and games software sales, 2007-17
                                                                        • Figure 20: Value of games console sales, 2007-17
                                                                        • Figure 21: Value of game software sales, 2007-17
                                                                      • Forecasts
                                                                          • Figure 22: Forecast value of and games software sales, 2007-17
                                                                          • Figure 23: Forecast value of game consoles sales, 2007-17
                                                                          • Figure 24: Forecast value of game software sales, 2007-17
                                                                      • Market Share and Segmentation

                                                                        • Key points
                                                                          • Xbox most popular console in 2011, though DS has highest lifetime sales
                                                                            • Figure 25: Total UK console sales, by volume, by brand, 2011 and lifetime
                                                                            • Figure 26: Share of console sales, by volume, by brand, 2011 and lifetime
                                                                          • Wii retains lifetime static console sales crown
                                                                            • Figure 27: Share of static console sales, by volume, by brand, 2011 and lifetime
                                                                          • Sony PSP consistently less popular than Nintendo alternatives
                                                                            • Figure 28: Share of portable console sales, by volume, by brand, 2011 and lifetime
                                                                          • Xbox 360 takes the majority of games sales in 2011
                                                                            • Figure 29: Total UK game sales, by volume, by platform, 2011
                                                                            • Figure 30: Share of total game sales, by volume, by platform, 2011
                                                                          • Declining success of Wii leaves Nintendo games lacking
                                                                            • Figure 31: Volume sales of the 50 bestselling video games* in the EMEAA region, by publisher 2000-11
                                                                            • Figure 32: Volume sales of the ten bestselling games* in the EMEAA region, by publisher, 2011
                                                                        • Companies and Products

                                                                            • Activision Blizzard, Inc.
                                                                                • Figure 33: Financial performance of Activision Blizzard, Inc., 2010 and 2011
                                                                              • Electronic Arts Inc.
                                                                                  • Figure 34: Financial performance of Electronic Arts Inc., 2011 and 2012
                                                                                • Microsoft Corporation
                                                                                    • Figure 35: Financial performance of Microsoft Corporation, 2010 and 2011
                                                                                  • Nintendo Co., Ltd
                                                                                      • Figure 36: Financial performance of Nintendo Co., Ltd., 2011 and 2012
                                                                                    • Sony Corporation
                                                                                        • Figure 37: Financial performance of Sony Corporation, 2011 and 2012
                                                                                      • Ubisoft Entertainment SA
                                                                                          • Figure 38: Financial performance of Ubisoft, 2011 and 2012
                                                                                      • Channels to Market

                                                                                        • Key points
                                                                                          • Online purchasing shows slight increase
                                                                                            • Figure 39: Methods of purchasing games, 2011 and 2012
                                                                                          • Downloads also show slight increase
                                                                                          • Brand Communication and Promotion

                                                                                            • Key points
                                                                                              • Console-only adspend drops dramatically
                                                                                                • Figure 40: Adspend, by game and console category, 2008-11
                                                                                              • Interest of large publishers boosts internet adspend
                                                                                                • Figure 41: Games and console adspend across all categories, by media type, 2008-11
                                                                                              • Nintendo remains overall top spender
                                                                                                • Figure 42: Top ten game and console advertisers, 2008-11
                                                                                            • Console Ownership

                                                                                              • Key points
                                                                                                • Interest in purchasing current-generation consoles extremely low
                                                                                                  • Figure 43: Console and accessory ownership, July 2012
                                                                                                • Sony and Microsoft gesture controls meet lukewarm response
                                                                                                  • Accessories unusually favoured by full-time employees…
                                                                                                    • Figure 44: Ownership of portable consoles, gaming accessories and static consoles, by working status, July 2012
                                                                                                  • …and parents of younger children
                                                                                                    • Finance deals could bring in valuable low earners
                                                                                                      • Accessory and portable bundles may boost sales
                                                                                                      • Gameplay Hours

                                                                                                        • Key points
                                                                                                          • Handheld consoles provoke greatest play levels
                                                                                                            • Figure 45: Hours spent playing games on consoles, July 2012
                                                                                                          • Wii usage has declined the most
                                                                                                            • Figure 46: Hours the Xbox 360 is played per week, by age, July 2012
                                                                                                            • Figure 47: Hours the PlayStation 3 is played per week, by age, July 2012
                                                                                                            • Figure 48: Hours the Nintendo Wii is played per week, by age, July 2012
                                                                                                          • Kinect ownership remains high for light users
                                                                                                            • PlayStation 3 heavy usage fails to lead to handheld ownership
                                                                                                            • Games Played

                                                                                                              • Key points
                                                                                                                • Puzzle games excel on portable console
                                                                                                                  • Figure 49: Games that consumers play, July 2012
                                                                                                                • Wii ownership likelihood spikes amongst family, health and music game players
                                                                                                                  • Figure 50: Ownership of a PlayStation 3, Xbox 360 or Nintendo Wii, by types of game played on a static console, July 2012
                                                                                                                • More intense games on portable consoles correlates to Sony ownership
                                                                                                                  • Figure 51: Ownership of a Nintendo DS series, Nintendo 3DS or Sony PlayStation Portable, by types of game played on a portable console, July 2012
                                                                                                                • Peripheral ownership mostly unaffected by game preferences
                                                                                                                  • Figure 52: Ownership of a Microsoft Kinect or PlayStation Move, by types of game played on a static console, July 2012
                                                                                                              • Accessory Ownership

                                                                                                                • Key points
                                                                                                                  • Webcams most popular accessory
                                                                                                                    • Figure 53: Accessory ownership, July 2012
                                                                                                                  • Communication-related accessory ownership highest in Inner and Greater London
                                                                                                                    • Figure 54: Accessory ownership, by region, July 2012
                                                                                                                • Casual Game Playing

                                                                                                                  • Key points
                                                                                                                    • Deep save state may mimic easy-quit functionality of casual games
                                                                                                                      • Figure 55: Attitudes towards casual games, July 2012
                                                                                                                    • Belief that casual games are as engaging as console games exists across age boundaries
                                                                                                                      • Figure 56: Agreement with the statement ‘I think casual games can be just as absorbing as console games’, by age, July 2012
                                                                                                                    • Love for low prices suggests Steam model may yield rewards
                                                                                                                      • Touchscreen controls on the Vita may appeal to casual players
                                                                                                                        • Figure 57: Agreement with the statement ‘I particularly enjoy using touchscreen controls with casual games’, by age, July 2012
                                                                                                                      • Younger men more likely to favour casual and console integration
                                                                                                                      • Attitudes towards Using the Console as an Entertainment Hub

                                                                                                                        • Key points
                                                                                                                          • Greater engagement would follow from free services
                                                                                                                            • Figure 58: Attitudes towards using a games console as an entertainment hub, July 2012
                                                                                                                          • Some consumers will not engage with entertainment consoles without demonstrable added value
                                                                                                                            • Over a third would likely enjoy using SmartGlass
                                                                                                                              • Less enthusiasm for centralised console control
                                                                                                                                • Consumers concerned about internet speeds will likely be appeased by fibre
                                                                                                                                  • Transparency is still important
                                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                                      • Figure 59: Best- and worst-case forecasts for the value of video game and console sales, 2012-17
                                                                                                                                      • Figure 60: Best- and worst-case forecasts for the value of console sales, 2012-17
                                                                                                                                      • Figure 61: Best- and worst-case forecasts for the value of video game sales, 2012-17
                                                                                                                                  • Appendix – Console Ownership

                                                                                                                                      • Figure 62: Console ownership, July 2012
                                                                                                                                      • Figure 63: Console ownership, by most popular console ownership, July 2012
                                                                                                                                      • Figure 64: Console ownership, by next most popular console ownership, July 2012
                                                                                                                                      • Figure 65: Portable console and accessories console ownership, by demographics, July 2012
                                                                                                                                      • Figure 66: Static console and Nintendo Wii console ownership, by demographics, July 2012
                                                                                                                                      • Figure 67: Xbox 360 and Nintendo DS series (original DS, Lite, XL – excluding 3DS) console ownership, by demographics, July 2012
                                                                                                                                      • Figure 68: Sony PlayStation 3 and Sony PlayStation Portable console ownership, by demographics, July 2012
                                                                                                                                      • Figure 69: Xbox Kinect and Nintendo 3DS console ownership, by demographics, July 2012
                                                                                                                                      • Figure 70: Sony PlayStation Move and Sony PlayStation Vita console ownership, by demographics, July 2012
                                                                                                                                      • Figure 71: Least popular static games console and other portable games console ownership, by demographics, July 2012
                                                                                                                                  • Appendix – Gameplay Hours

                                                                                                                                      • Figure 72: Hours of gameplay, July 2012
                                                                                                                                      • Figure 73: Console ownership, by hours of gameplay (Sony PlayStation 3), July 2012
                                                                                                                                      • Figure 74: Console ownership, by hours of gameplay (Xbox 360), July 2012
                                                                                                                                      • Figure 75: Console ownership, by hours of gameplay (Nintendo Wii), July 2012
                                                                                                                                      • Figure 76: Hours of gameplay (tablet computer), July 2012
                                                                                                                                      • Figure 77: Hours of gameplay (Sony PlayStation 3), by demographics, July 2012
                                                                                                                                      • Figure 78: Hours of gameplay (Xbox 360), by demographics, July 2012
                                                                                                                                      • Figure 79: Hours of gameplay (Nintendo Wii), by demographics, July 2012
                                                                                                                                      • Figure 80: Hours of gameplay (Nintendo DS series), by demographics, July 2012
                                                                                                                                      • Figure 81: Hours of gameplay (tablet computer), by demographics, July 2012
                                                                                                                                      • Figure 82: Hours of gameplay (smartphone), by demographics, July 2012
                                                                                                                                      • Figure 83: Hours of gameplay (personal computer/laptop), by demographics, July 2012
                                                                                                                                  • Appendix – Popular Games

                                                                                                                                      • Figure 84: Games that consumers play, July 2012
                                                                                                                                      • Figure 85: Console ownership, by most popular games that consumers play on my static console, July 2012
                                                                                                                                      • Figure 86: Console ownership, by next most popular games that consumers play on my static console, July 2012
                                                                                                                                      • Figure 87: Console ownership, by other games that consumers play on my static console, July 2012
                                                                                                                                      • Figure 88: Console ownership, by most popular games that consumers play on my portable console, July 2012
                                                                                                                                      • Figure 89: Console ownership, by next most popular games that consumers play on my portable console, July 2012
                                                                                                                                      • Figure 90: Games that consumers play, by most popular games that consumers play on my static console, July 2012
                                                                                                                                      • Figure 91: Games that consumers play, by next most popular games that consumers play on my static console, July 2012
                                                                                                                                      • Figure 92: Games that consumers play, by other games that consumers play on my static console, July 2012
                                                                                                                                      • Figure 93: Games that consumers play, by most popular games that consumers play on my portable console, July 2012
                                                                                                                                      • Figure 94: Games that consumers play, by next most popular games that consumers play on my portable console, July 2012
                                                                                                                                      • Figure 95: Most popular games that consumers play on my static console, by demographics, July 2012
                                                                                                                                      • Figure 96: Next most popular games that consumers play on my static console, by demographics, July 2012
                                                                                                                                      • Figure 97: Least popular games that consumers play on my static console, by demographics, July 2012
                                                                                                                                      • Figure 98: Most popular games that consumers play on my portable console, by demographics, July 2012
                                                                                                                                      • Figure 99: Next most popular games that consumers play on my portable console, by demographics, July 2012
                                                                                                                                  • Appendix – Accessory Ownership

                                                                                                                                      • Figure 100: Accessory ownership, July 2012
                                                                                                                                      • Figure 101: Webcam accessory ownership, by demographics, July 2012
                                                                                                                                      • Figure 102: Health or fitness aid accessory ownership, by demographics, July 2012
                                                                                                                                      • Figure 103: Headset and microphone for online console gaming accessory ownership, by demographics, July 2012
                                                                                                                                      • Figure 104: Nintendo Wii ‘game enhancers’ accessory ownership, by demographics, July 2012
                                                                                                                                      • Figure 105: Dance mat accessory ownership, by demographics, July 2012
                                                                                                                                      • Figure 106: Keyboard for online console gaming accessory ownership, by demographics, July 2012
                                                                                                                                      • Figure 107: Light gun accessory ownership, by demographics, July 2012
                                                                                                                                  • Appendix – Casual Game Playing

                                                                                                                                      • Figure 108: Attitudes towards casual games, July 2012
                                                                                                                                      • Figure 109: Console ownership, by most popular attitudes towards casual games, July 2012
                                                                                                                                      • Figure 110: Console ownership, by next most popular attitudes towards casual games, July 2012
                                                                                                                                      • Figure 111: Games that consumers play, by most popular attitudes towards casual games, July 2012
                                                                                                                                      • Figure 112: Games that consumers play, by next most popular attitudes towards casual games, July 2012
                                                                                                                                      • Figure 113: Most popular attitudes towards casual games, by demographics, July 2012
                                                                                                                                      • Figure 114: Next most popular attitudes towards casual games, by demographics, July 2012
                                                                                                                                  • Appendix – Attitudes towards Using a Console as an Entertainment Hub

                                                                                                                                      • Figure 115: Attitudes towards using a games console as an entertainment hub, July 2012
                                                                                                                                      • Figure 116: Console ownership, by most popular agreement with attitudes towards using a games console as an entertainment hub, July 2012
                                                                                                                                      • Figure 117: Console ownership, by next most popular agreement with attitudes towards using a games console as an entertainment hub, July 2012
                                                                                                                                      • Figure 118: Agreement with the statements ‘I would be more likely to use my console as an entertainment hub if it were free to do so’ and ‘I like the idea of managing/accessing all of my entertainment subscriptions and games from the same place’, by demographics, July 2012
                                                                                                                                      • Figure 119: Agreement with the statements ‘I would only pay for entertainment services on my games console if I did not have a smartphone, laptop, tablet or smart TV in the house to use instead’ and ‘I would not use a console as an entertainment hub if my smart, internet-connected television could access the same content’, by demographics, July 2012
                                                                                                                                      • Figure 120: Agreement with the statements ‘I would be more likely to use a games console as an entertainment hub if I could connect other devices to it’ and ‘The uncertain video quality of streamed television and films prevents me using my console as an entertainment hub’, by demographics, July 2012
                                                                                                                                      • Figure 121: Agreement with the statements ‘I would not use my console as an entertainment hub as I would not trust a console manufacturer to process payments for me’ and ‘I would rather pay individually for each service accessed from my games console, than a general access fee’, by demographics, July 2012
                                                                                                                                      • Figure 122: Agreement with the statement ‘I like the idea of my console storing my card details and managing the payments to lots of different services’, by demographics, July 2012

                                                                                                                                  Companies Covered

                                                                                                                                  • Activision Blizzard, Inc.
                                                                                                                                  • Apple Computer UK Ltd
                                                                                                                                  • Blizzard Entertainment
                                                                                                                                  • Electronic Arts, Inc
                                                                                                                                  • Fédération Internationale de Football Association
                                                                                                                                  • Microsoft Corporation
                                                                                                                                  • Nintendo Co Ltd
                                                                                                                                  • Sony Computer Entertainment Europe
                                                                                                                                  • Ubisoft

                                                                                                                                  Video Games and Consoles - UK - October 2012

                                                                                                                                  US $2,672.70 (Excl.Tax)