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Internet trends: marketing research & predictions

Video Games Trends Review

March 30th, 2008 by

Some contrasting facts shows the transition phase we are into today –

Netflix surveys users on Xbox & PS3 to gauge their interest in streaming movies to their gaming consoles.

Connecting the dots the larger picture looks like – our entertainment quota slowly gravitating towards video games from movies. Infact Shrek the Third didnt do as well as Shrek 2. DreamWorks Animation CEO and former Disney honcho Jeffrey Katzenberg speaks out on the same.

Competition at retail from other sources such as video games has had an impact on the overall home video market and on the performance of individual titles including “Shrek the Third.”

In order to have a better understanding take a look at NPD 2007 best seller video games for US market. Comparing this with 2006 & 2005 NPD best sellers reveals an astonishing trend for video games.


Analysis of the time spent on the Top 10 games over the years shows a substantial shift in the duration for which video games are played. A good majority now plays best sellers for relatively shorter duration 10 -20 Hours in contrast to 2005,where majority used play games for more than 100 hours . For a long the gaming industry primary focused on hardcore gamers – a relatively small segment accounting for disproportionate share of revenue. The thought has taken virtually u turn since 2006.


Hottest video platform:

Game publishers have always been subject to a nerve-wracking business cycle, which forces them to essentially reinvent their software every five years. That’s roughly how often Sony, Microsoft and Nintendo introduce new consoles, which require new software formats and render most older games obsolete.

A. The Players

In 2007 PS2, Xbox 360 & the new entrant Wii emerges as equally popular platform for Top 10 games.PS2 though constantly losing its popularity since 2005, emerges to be most fitting platform across all strata of gamers & games.[less than 10 Hrs to more than 100 Hrs]. Also Xbox based games shows constant decline in popularity beyond 20 hours.

Wiis unavailability coupled with its higher price (games+console) has definitely pushed it to a backseat.

Rank Popular Console Average Price
1 Ninetendo Wii Console $650
2 Playstation Portable Slim System $175
3 Xbox Elite System Bundle $482
4 Xbox 360 Premium System $335
5 Playstation 3 Console with 80GB Hard Drive & Motorstrom $501

Source : Market Reporter 2007

B. Sales and growth by company

Company 2007 2006 2005 Growth
Sony $8.3 $7.8 $5.9 6.4%
Nintendo $8.1 $4.3 $4.2 88.4%
Microsoft $5 $4.3 $3.1 16.3%
Sega Sammy $4.5 $4.7 $4.4 4.3%
Electronic Arts $3.1 $3 $3.1 0

Source: seekingalpha
Total video game hardware and software sales of $42.8 billion for the year ending March 31, 2007. Comparable sales in 2006 were $36.1 billion and in 2005 they were $31.3 billion.

C. Online Stats

We introduce another trend tool Google checkout trends which aggregates the sales data of Google Checkout merchants. In line of Google trends,it shows the revenue of each item i.e, price multiplied by the quantity sold. On flipside a higher price can artificially inflate “popularity”.

Google Checkout Trends reinforces Ninetendos constant revenue (Price x Quantity sold) pressure vis-a-vis Xbox & Playstation.


Google Checkout Trends: wii, playstation, xbox

D. Buzz:

Interesting to note again – as we pointed out in 2007 trends review , even in first quarter of 2008 most of our blog discussions are about wii whereas in forums we are talking mostly about Xbox.

The future:

Xbox is implementing social network methods: – Xbox to adopt player developed games. A long tail economy much like FaceBook applications is on cards. Going by game analyst Ed Barton Xbox 360 will make a hit .

But don’t underestimate PS3 – as Atindriya Bose ,Country Manager for Sony Computer Entertainment India says “ Xbox & PS3 can become bitter rivals like coke & pepsi in future..”

Gaming now permeates just about all of society, creating fresh ways for marketers to connect. Millions of non-golfers are swinging virtual clubs as Nintendo’s Wii transformed video games. Senior citizen centres bought Wiis to entertain guests and connect with grandkids. MTV invested US$500 million in online games, on top of the millions it spent for Addicting Games. Even B2B marketers will be smart to give gaming a fresh look while blending in messaging, training or recruiting.

Game makers won’t construct a whole digital universe; they will simply provide the blueprint and distribute the creation process to millions of users through Procedural generation. Here is next 25 years of videos games.

Video games and Advertising:

Video games popularity has given inroad to In Games Advertising – an opportunity Microsoft sensed in early 2006 .

eMarketer predicts U.S. video game advertising spending will reach $1 billion in 2012, up from $502 million in 2007. Of this total, in-game advertising spending will grow to $650 million in 2012, from $295 million in 2007.


Google found it hot only recently and its “Ad-sense for games” will soon be a reality. With Microsoft taking the lead this market is bound to be much more hotter. Toyota’s latest commercial is available exclusively on Xbox. Some more brands experimenting in this space Nike, Adidas, Reebok ,Coke, Pepsi, Mountain Dew ,Gatorade , Ford ,BMW, Samsung , McDonald’s, KFC , Burger King and Axe.

However skepticism are around “young people don’t like advertising very much.” Sony CEO says. With reference to Bunnyfoot survey he is right The survey reveals low recognition of ads in sports titles.

In Game Ads has to be more than product placements- here is Clickz checklist and tips for In Games Advertising.

Related Links
Morphing Video Games into Movies
Speculating on the future of video games

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5 Responses

  1. Jefferson Burruss Says:

    Interesting compliation of data. The forecasting of software sales is interesting, although I suspect that shifts in the install base of the consoles (PS3 could still make up ground as PS2 owners start converting is larger numbers, the Blu-ray shakeout has some sales effect, etc) could result in major changes in software sales forecasts.

  2. Jack Says:

    I’m over 60 and I have been an avid video game player for the last 3 or 4 years. I enjoy mostly good FPS’s (“shooters”) and some RPGs (“role playing games”). I personally have no interest in sports, racing, arcade or puzzle games. A good shooter with a half-way decent plot is what I enjoy, e.g. Kotor, Halo, Bioshock, et al.
    I think the industry is missing out on a huge potential market. I would suggest that they make a novice mode in their gamnes, supereasy so that old folks don’t get frustrated immediately. They should package “walkthroughs” and “cheats” with their games to really help newcomers in particular to quickly overcome the early frustrations that immediately turn oldsters off. I’m 61, not 16, and I wouldn’t pretend to try to compete with a 16 year old, nor should I have to. Video games, like movies, should be easy and available to all ages to enjoy. The “hard core” studs can always play the insane modes.

  3. Chad Bryan Says:

    I personally am an avid video game player. I like to play all kinds of games and I am known to kick a few guys butts in them when I am challenged. In school, we were doing a project on the trends, and I think that this really was a good information source for my project. I think that the project we were doing was very in dept and it was thrilling and intriguing while still educating. I think that the people who make these graphs and study this information, it takes them time, and I think that they really gave it a punch. I would like to see sellers of 2008 and 2009 during the beginning, but I know that I can’t expect everything from this one site. It has helped me and I’m utterly grateful. Thanks to the developers of this blog.

  4. Death of a middleman « Tom Puukko Says:

    […] or immersion.  Most webpages are left in less than 10 seconds, yet games can draw in people for 100 hours or more.  Utility or immersion.  This force is even affecting academia.  In a 2008 study published in […]

  5. Rueben Derosa Says:

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