The global games industry will be worth $35.3 billion in 2005, 5.3% higher than in 2004

Informamedia:: The fifth edition of Informa's Dynamics of Games report has found that the console sector represents around half of games revenues worldwide. With the next generation consoles rolling out from November 2005, this will result in another peak - the largest ever - in 2007, when the market will be worth $58.4 billion.Sony will be less dominant this time around. We still anticipate the PS3 to take the largest share in the next wave of consoles, but it will not have such an easy time of it this time around. The Xbox 360 will benefit from first-mover advantage and Nintendo has already revealed some interesting ideas for its Revolution concept. Mobile games is the fastest growing 'new' games sector, and is expected to generate revenues of $2.6 billion in 2005. The broadband sector is another emerging market that is starting to impress. The broadband sector is being assisted by fast growth from Xbox Live! and, to a lesser extent, PS2 online. The launch of next generation machines will provide another boost for online games and help the market to settle on its most effective revenue model.

Global Games Market Value by Sector ($ million)

	2000	2005	2010
Console Hardware	4,791	3,894	5,771
Console Software*	9,451	13,055	17,164
Handheld Hardware	1,945	3,855	1,715
Handheld Software*	2,872	4,829	3,113
PC Software*	5,077	4,313	2,955
Broadband	70	1,944	6,352
Interactive TV	81	786	3,037
Mobile	65	2,572	11,186
Total	24,352	35,248	51,292

*sales and rental

Source: Informa Telecoms & Media

We are now talking about the games sector as a near-$60 billion business, which is an impressive number. But there are still some issues to be tackled. Broadband games are doing well, but will gain at the expense of the PC market which is in irreversible decline. The Interactive TV sector is still looking for a business model and there is also the issue of piracy to consider. We have calculated that the industry will lose $6.6 billion to piracy in 2005 and, if unchecked, that could rise to more than $9 billion in 2010.

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