Introduction
We believe that the U.S. videogame industry is poised for several years of strong growth. Sony launched the PS2 several months ago, and Nintendo recently launched the Game Boy Advance. Microsoft and Nintendo are readying their 128-bit consoles, the Xbox and GameCUBE, respectively, for launches this November. However, what do we really know about the gamer, the individual responsible for buying these next generation products? We need to ask several questions: Who is he or she? How often do they really play games? How much do they know about new videogame consoles? Will the gamer play games online? What does the gamer’s household look like? What do gamer’s preferences tell us about the success or failure of next-generation gaming platforms?
As part of our gaming research, IDC recently completed a report, Trends Today, Insights for Tomorrow, IDC’s 2001 Videogame Survey, analyzing survey results from the annual U.S. Videogame Survey. A total of 350 households owning at least one videogame console were contacted via telephone, and the primary gamer (the individual spending the most time playing games on the videogame console) in that household, whether that was the 12-year old or 50-year old, was questioned. This very timely information can and should be utilized as the industry continues to strategize for future growth over the next several years, a market which is expected to reach $21.1 billion by 2003. Importantly, these survey results can help us to better understand the videogamer and utilize this information to analyze and predict future patterns.
Results confirmed several trends that shouldn’t be too surprising. With an average age of 21.1 years, the gamer population is about three-quarters male (a good point to use on those who assume that all gamers are male teenagers). The majority of primary gamers across all major platforms — Sony’s PlayStation/PS one and PS2, the Sega Dreamcast and Nintendo 64 — are male. We believe that three factors are responsible for this male-oriented trend: marketing efforts, game content, and perception.
Gamers are also very devoted to gaming, spending an average of four days per week and 2.3 hours per day playing games. They purchase about 1.4 new games per month. And, the number one way that they find out about new games is through advertising (TV, print and Internet).
Video Game Survey
However, a few new trends in the survey results have begun to emerge in the past few years. Perhaps the most interesting in the growing proportion of primary gamers that are female teenagers for newer platforms — the PS2 and Dreamcast. In fact, 9.1% of PS2 primary gamers and 11.4% of Dreamcast primary gamers are comprised of female teenagers, a proportion significantly higher than on any other platform. The gaming industry appears to be making slight headway into this traditionally non-gaming segment, although clearly, to adequately penetrate the female gaming segment (as well as older adults, both male and female), the gaming industry still has quite a bit of work to do in terms of marketing efforts and game content.
We also asked survey participants about interest in online gaming, and found that they are indeed interested in utilizing their next-generation consoles for online gaming activities. When asked specifically about online gaming, about 60% of gamers expressed high interest levels (with a rating of 4 or 5 on a scale of 1 to 5, in which 1 indicated not interested and 5 very interested). That same question yielded results which increased to 65% among PS2 households. Additionally, the ability to download new games/levels/characters from the Internet was of high interest among 76% of respondents.
Without a doubt, gamers are interested in online gaming with their videogame consoles. Many issues still need to be resolved to make this a reality, including the technical aspects of connecting the console to broadband access, integrating online play into games, designing online gaming platforms and building a revenue generating business model, just to name a few. Nevertheless, the hype is beginning to build, and along with that, expectations of what an online gaming experience should and should not be.
Clearly, Microsoft and Sony are focused on broadband-based online gaming programs for their next-generation consoles. Survey data indicates that broadband households have much higher interest levels in online gaming activities and are prime targets for an array of gaming options and services. Although only 6.5% of videogame households have broadband access, that penetration will continue to grow, which bodes well for Microsoft and Sony efforts.
Other videogame household characteristics — higher rates of PC and Internet penetration, DVD players, movie rentals, among others, than the average U.S. household- indicate that these gaming households are willing to spend disposable income in order to have the latest and greatest in electronic entertainment products. Again, this is good news for both the uptake of next-generation platforms as well as for online applications with those new platforms.
Video Game Survey, Continued
Another interesting piece of data relates to gamer’s knowledge of new videogame consoles. About a third of respondents had heard that at least one new videogame consoles would be launching in the next several months. Of this group, 43% could name the Microsoft Xbox and 35% could name the Nintendo GameCUBE. Interestingly, 8.5% cited the PS2 and a very slim 1.2% the Dreamcast; even though the former had been on the market for six months at the time of the survey and the latter, for close to two years, gamer knowledge sometimes lags market trends. And importantly, while a portion of gamers are extremely knowledgeable about new systems (regularly visiting game-related websites, reading game mags, etc.), there’s still a group of gamers out there that don’t stay up to date with the latest gaming related information.
About a third of respondents indicated that they had plans to purchase a console within the next six months. The overwhelming majority of this group, 63%, planned to purchase a PS2. Significantly smaller numbers, 4.5% and 6.3%, had Xbox and GameCUBE purchase plans, respectively. We don’t think that these relatively low numbers should be taken as a negative sign for potential success and/or failure of either of the two platforms as the survey was taken before Microsoft and Nintendo unveiled their games at E3 2001, and really, before any type of real product marketing had begun.
All of this survey data (plus a lot more that can’t be covered in this article due to lack of space) points to interesting usage patterns and future gaming trends. Does it give also give us the understanding of which platform will be dominant in the 128-bit console battle? While not revealing a clear cut winner, the survey data does give us information as to what Sony, Nintendo and Microsoft need to do to ensure that their platforms hold a prominent place in the gaming market.
First of all, Sony needs to ensure that the content is out there for their platform; while interest in purchasing the PS2 is extremely high, we also know that a lot of gamer’s are purchasing the PS2 simply because it’s the newest hardware available, not because the games are that great (the recent release of GT3 and impending release of Final Fantasy X might actually swing that factor to the games available for the platform, although it’s too early to tell). Thus, if similar games (not just ports, but with similar quality and gameplay) are available on the Xbox and/or GameCUBE, it’s entirely possible that allegiances could switch to those two competing platforms simply because they are the newest available.
Nintendo and Microsoft need to kick off the marketing campaigns by showing what’s unique, interesting and cool about the GameCUBE and Xbox. To that end, Nintendo had a fairly good showing at E3 2001, and we think they’ll really focus on their content to drive sales. Reaction to Microsoft games has been extremely mixed, and we think that Microsoft will focus on both the content and online capabilities of its platform to drive sales. Differentiation could be the key to industry dominance.
