CONNECTED GAME CONSOLE MARKET ANALYSIS

Market Challenges And Opportunities

Market Dynamics-Drivers

1. Rising expenditure on games is expected to drive growth of the global connected game console market during the forecast period

Consumer expenditure on games and gaming equipment has increased significantly in the recent past. Furthermore, consumers are increasingly spending on different video game accessories such as controllers, light guns, joysticks, and more. According to Coherent Market Insights’ analysis, North America held the dominant position in the global video games market in 2014, accounting for US$ 15 billion in terms of revenue. Thus, these factors are expected to drive growth of the global connected game console market during the forecast period.

2. Increasing broadband penetration worldwide is expected to propel the global connected game console growth over the forecast period

Broadband penetration has increased worldwide, especially in developed countries such as the U.S. and Canada. As a result of this, the demand for gaming consoles has increased with connected game console providers pushing sales of connected game consoles. According to the International Telecommunication Union (ITU) report 2013, in developed countries, around 77% of the total population has access to the internet as compared to 7% in emerging economies. Furthermore, according to the same source, Europe reported the highest broadband penetration of 75% followed by North America and Latin America with 61%. Hence, rising broadband penetration is expected to propel the global connected game console growth in the near future.

Market Dynamics- Restraint

1. High cost of game console is expected to hamper the global connected game console market growth during the forecast period

Although consumer expenditure has increased over the years, the prices of game consoles have risen similarly. With the introduction of new technologies and upgraded versions of consoles, the price of connected game consoles is increasing too. Therefore, these factors are expected to hamper the global connected game console market growth in the near future.

2. Rising threat from smartphone gaming is expected to restrain growth of the global connected game console market during the forecast period

Smartphone gaming is increasing rapidly across the globe, especially in emerging economies. Game development time for mobile games is far lesser than that for game consoles. Moreover, most mobile games are available for free or cost substantially lesser than those for game consoles. This is affecting growth of the market to some extent. According to the Ericsson Mobility Report, smartphone ownership was reported at 1.3 billion in 2012 and is expected to grow to 5.6 billion by 2019. Thus, these factors are expected to hinder the global connected console market in the near future.

Market Opportunity

1. Rising investments in research and development activities can present lucrative growth opportunities

Game console manufacturers are focused on research and development activities and investing substantially, in order to introduce innovative features in their consoles. With this, market players can capitalize on opportunities and gain a sustainable advantage over their competitors and enhance their consumer base. For instance, in 2013, in 2013, Microsoft Corporation’s R&D investment was valued at US$ 9.8 Bn.

2. Constant collaboration and partnership activities can offer major business opportunities for market players

Key companies in the market are focused on collaboration and partnership activities, in order to enhance their market presence. For instance, in 2014, Nintendo collaborated with Yoplait USA, Inc., a yogurt providing company to place characters such as Mario, Luigi, Peach and Bowser on the side of Yoplait’s Petits, Filous, and Frubes products. The objective of this collaboration was to enhance the company’s visibility in the market.