Online Gaming Gets Big Boost From Consoles, Handhelds

In-Stat: Video game consoles and handheld game consoles are greatly expanding the market for online gaming. Worldwide console and handheld online gaming subscribers numbered 3.4 million in 2004, and could exceed 30 million by 2009. Whether Sony continues to offer free online console subscriptions or goes to a paid subscription service when it releases the PlayStation 3 in 2006 will have a big impact on subscriber growth and revenues over the next few years. Microsoft is the only console maker so far to launch a paid subscription service. And we expect the release of the Xbox 360 and additions to its subscription service to accelerate Microsoft to just under 50% annual subscriber growth between 2004 and 2009.

• Sony currently believes that a paid service is too large a barrier to console online gaming, and uses free online play primarily to reinforce customer loyalty.

• Nintendo has taken a hands-off approach to online console gaming thus far, but is taking a very aggressive approach in handheld console gaming, setting up a network of Wi-Fi hotspots in Japan, North America and Europe to host its free DS online service.

• Sony has launched several networked gaming titles for its PSP handheld console in 2005. However, Sony has not been as active as Nintendo in setting up hotspot networks or marketing the online service.

Console and Handheld Online Gaming: Overshadowing the PC Publ 20060103