Video Game Industry Will be a Lucrative Channel
Though there are many varying opinions of the current consoles out there, there seems to be no doubting that the gaming console industry will continue to be a financial boon for whoever can muster the courage to fight their way into some decent market share figures.
According to a new report titled "U.S. Console Games Forecast, 2007 to 2012," JupiterResearch indicates that the U.S. game console market will produce revenues of $66 billion through 2012.
Over the course of the next five years the competition between Nintendo, Microsoft, and Sony will become more heated, with market share ranges of less than 10%, compared to the more disparate 33% range in 2005.
In 2008, console penetration in U.S. households is expected to exceed 50%.
Advertisers have already noticed the big potential that lies in these numbers. Video game advertising spending will exceed $2 billion in 2012, which is a far cry from the comparatively measly $370 million spent in 2006, according to Parks Associates. This reflects a compound annual growth rate (CAGR) of 33%, which is noticeably higher than other major ad categories.
In-game advertising will see the biggest increases in spending. With more viable channels through which advertisers can deliver their messages in a more targeted and flexible fashion, in-game advertising spending is expected to exceed $800 million in 2012, which will be about 84% of the market.
The Yankee Group is more bullish with its expectations for in-game advertising. The group foresees $971.3 million to be spent on the medium by 2011.
"Advertisers are increasingly finding in-game advertising to be a greater investment value because of the variety of opportunities that exist in and around games. Video games represent an ‘above the line’ opportunity, which means that video games should be used to build brands and not as a call to action that distracts from the game play," said Michael Goodman, director of digital entertainment in Yankee Group’s Consumer Research group.
Sources:
http://www.webpronews.com/topnews/2007/07/09/console-game-
revenue-to-hit-66-billion
http://www.emarketer.com/Article.aspx?id=1005113
http://www.webpronews.com/topnews/2007/07/06/the-in-game-
advertising-market
