Online Games Forecasts

A recent report from DFC Intelligence forecasts that the worldwide market for online games will reach $9.8 billion in 2009. This represents a 410% increase over 2003 revenue of $1.9 billion. By 2009, the largest market for online games is expected to be the Asia-Pacific region with $4.2 billion in revenue.

Korea and Taiwan are already well-established markets and China and Japan are expected to be the two fastest growing countries for online games.

According to the 660-page report 'The Online Game Market 2004', broadband is the biggest driver of market growth: at the end of 2003 an estimated 81 million households worldwide had broadband, whereas by 2009 the report forecasts that number reaching 228 million and the number of online games players worldwide reaching 376 million.

Online games are attracting a broader demographic than is sometimes realised / portrayed. Whereas massively multiplayer online role-playing games (MMORPG) like EverQuest have received the most attention, casual games via services like Yahoo! Games, MSN Games at the Zone.com and Pogo attract tens of millions of users and at any given time will have 150,000 to 200,000 simultaneous players each. In many cases, over 50% of their users are adult females.

There is also a growing market of online games for kids. Content for children includes subscription-based products like Disney's Toontown, advertising / sponsor supported services like Neopets which has over 20 million users, and the traditional video game audience which is slowly starting to get on board with services like Xbox Live.

Despite the growth potential, the report's lead author David Cole says that online game companies are still grappling with business models: 'Many services are free and dependent on often elusive advertising support... but on the positive side, it has become clear that there are many potential viable business models, with advertising just one part of the mix'. These include tiered subscription packages, game downloads, on-demand distribution, virtual property sales, mini-transactions, pay-per-play games of skill and other revenue generating models. 'The number of potential consumers for online games is so much higher than with the traditional packaged goods business that less revenue per consumer is needed to make online games a really substantial industry'.

DFC Intelligence is a market research firm focused on video games, PC games, online games and interactive entertainment, and offering free monthly research briefs to those registering at www.dfcint.com/mailing_signup.html

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

• DFC Intelligence
• All news