Where the next-generation console fits in today’s video game market v1.0

Table of Contents

  1. Summary
  2. The great unboxing
  3. Market trends
  4. Here comes the next-generation console
  5. The rise of mobile gaming
  6. Headed toward change
  7. About Joost van Dreunen


The console era is over — or so a growing number of game-industry executives would have us believe. Social gaming, which doesn’t require the intense processing power consoles do, has been lauded as the shape of things to come. But the recent decimation of social game leader Zynga, which now serves 294 million users every month, fogs the future of the game industry, especially since social games no longer offer the explosive growth they did a year ago. Only two months ago Zynga counted 333 million monthly active users, so the company has experienced a 12 percent decline in its user base.

Two recent events in the gaming industry provide a glimpse of what’s to come in the console industry. First, in July juggernaut Sony acquired Gaikai for $380 million. Gaikai provides streaming games across different platforms. Second, an Android-based console named OUYA received over $8 million in funding through Kickstarter. Both of these occurrences have the makings of a new age in console gaming.

Key highlights in this report include:

  • Compared to 10 years ago, when consoles accounted for 96.3 percent of annual video game revenues, the segment today accounts for a much smaller part of the overall market, at 69.2 percent.
  • Console gaming is still a dedicated activity that takes place in the living room. Competing platforms like PC-based or mobile gaming offer a convincing alternative as the console business continues to struggle
  • Investment in streaming technology and the emergence of open-source platforms are driving change for the console and hardware industry.

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