The games market is facing a lull, with new consoles not performing as strongly as originally thought, according to new research from eMarketer.
The
Video Games: Where to Now? report claims that the beginning of 2006 has seen the games industry find itself in a “curious” position as it moves from one generation of console hardware to another.
Explaining the situation, James Belcher, eMarketer senior analyst and co-author of the report, said: “Microsoft’s second-generation console, X-Box 360, was launched successfully in late 2005, but has yet to take advantage of its ‘first-mover advantage’ because the supply of units has not kept up with demand.”
He continued: “Sony’s Playstation 3 and Nintendo’s Revolution boxes are slated to launch in the latter half of 2006, which should make 2007 the year to watch.”
This slight depression is not expected to last, with a solid increase in digital downloading and online game playing fuelling the market.
According to Informa Telecoms, broadband games will make up 12.4% of the total gaming sector in 2010, up from 5.4% in 2005.
eMarketer claims that currently there are 40 million households in the US with a game console and 70 million US internet users who regularly play games online.
On-demand entertainment is increasingly entering into the market place, with advertisers having to find ways to target their audience.
One way advertisers can cash in on this expanding market is by investing in ‘Advergaming,’ where games are designed around a product to promote it. Elsewhere, in-game advertising can place products in games in the background, in the hands of characters, or elsewhere (see Global Games Industry To Reach $58.4 Billion In 2007).
The in-game advertising market looks set to increase in popularity, with research from the Yankee group projecting the channel to total $562.5 million by 2009, up from $34 million in ad revenues in 2009, compared to $83.6 million in 2004.
Despite this form of advertising being relatively new, it is proving popular with advertisers, with computer games featuring the technology enjoying a 60% increase in awareness of products, according to a joint study by Nielsen Interactive Services and Double Fusion (see In-Game Advertising Increases Product Awareness By 60%).
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