Connected Game Console to be a US$ 15 Billion Market by 2020

Shipment of connected game consoles is expected to reach 42.3 billion units by 2016, up from 39.3 billion units in 2014. However, by 2020, the shipments will drop to 35.7 million units, owing to fewer upgrades in terms of hardware and technology. Handheld consoles are forecasted to wane in popularity, with their market share dropping to 24.3% in 2020 from 45.7% in 2014.

Xbox One and PS4 are the most popular connected game console globally. Shipment of these two gaming consoles is expected to reach 30.4 billion by 2016, up from 16.4 billion units in 2014.

FMI forecasts 6.9 billion units of Nintendo Wii U to be shipped in 2016, down from 8.6 billion units that were shipped in 2014. Further, Microsoft Xbox 360 will also witness a slump in sales, as Xbox One gains traction among gamers.

On the basis of product type, FMI has segmented the global connected game console market into connected console and service. Connected console’s share was nearly 32% in 2014, however, as service segment gains traction, the market share is expected to drop to 23.4% by 2020.

The service segment is further sub-segmented into prepaid and other direct service. Prepaid service is currently the dominant sub-segment, accounting for nearly 86% market share; however, by 2020, the other direct service sub-segment is expected to represent over 50% of the market share.

North America Will Remain Lucrative in Terms of Annual Sales 

North America is the largest market for connected game consoles, followed by Western Europe and Latin America. The North America connected game console market is expected to surpass US$ 5 billion in revenues by 2016.

Increasing spending on gaming and rising popularity of online gaming platform are key factors fuelling the adoption of connected game consoles in North America.

Western Europe is the second largest market for connected game consoles after North America. The Western Europe connected game console market is expected to reach US$ 1.8 billion by the end of 2016, up from US$ 1.2 billion in 2014.

Japan has always remained a lucrative market for gaming industry. The connected game console market in Japan was valued at US$ 1.1 billion in 2014; FMI expects it to expand at a CAGR of over 7% between 2014 and 2020. Piracy of popular video games is a concern, and it can eat into the revenues of connected game console manufacturers.

The key companies analysed by Future Market Insights (FMI) in its research report are Microsoft Corporation, Sony Corporation, Nintendo Co. Ltd., and NVIDIA Corporation.

All the leading players in the connected game console market are making substantial investment in research and development (R&D) to gain a competitive edge in the market. For instance, in 2014, Microsoft corporation acquired Mojang AB – a game developer company – in order to include Mojang AB’s Minecraft game to Microsoft’s gaming portfolio.

Sony Corporation, in 2014, announced the launch of POJECT MORPHEUES in order to expand its footprint in the virtual reality gaming segment. In 2013, Sony partnered with major game studios such as Electronic Arts, Inc, Activision Blizzard Inc. and Ubisoft Entertainment S.A for exclusive content for Sony’s PlayStation devices.