Videogame Distribution Shifting Online, Even for TV-Tethered Consoles

Internet-enabled devices such as phones, tablets and computers are making it insanely easy for consumers to discover and play new videogames.

And it’s that kind of online connectivity that is expected to drive the next wave of growth on the consoles.

In a new report, market research firm DFC Intelligence said it believes console sales will regain some momentum in 2014 and 2015 as new systems from Nintendo, Microsoft and Sony hit the market.

As a result, DFC is estimating that by 2017, 39 percent of console game revenue will be via online distribution and online revenue sources.

Nintendo is the first of the hardware makers to announce plans for its next console, which is expected to hit this holiday season. The Wii U will come with features encouraging consumers to connect online, including video chat and Miiverse, a social network where avatars walk around a virtual plaza. With Miiverse, game players will be able to post their thoughts in speech bubbles that appear over their heads with text or drawings — sort of like a status update on Twitter or Facebook.

With existing consoles, players often have the option of downloading new content for games, but typically the original game was purchased on a disk and didn’t require an Internet connection. Sony and Microsoft have not yet announced their plans, but both are expected to eventually release new hardware that will be more connected to the Internet than ever before.

Other companies — like Amazon, Valve’s Steam and Electronic Arts — are also in various stages of offering digital distribution channels.

Despite reports of a soft console market over the past year, DFC is still forecasting the industry to grow over the next five years to $82 billion in 2017 from $67 billion in 2012.

In addition to new consoles fueling some of this growth, the research firm said, the increase is thanks to PC and mobile gaming. Worldwide revenue from online games will reach $35 billion in 2017, up 84 percent from 2011, and PC game revenue is expected to pass $25 billion in 2017, up from about $20 billion in 2012.


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