IDSA: Strong Growth In Store For Gaming

By Greg Tarr -- TWICE, 6/24/2002

LOS ANGELES — LOS ANGELES–The North American video game market, including PC games, is projected to reach $21.4 billion by 2005, according to a report cited by IDSA president Doug Lowenstein at the recent Electronic Entertainment Expo (E3).

The report, which was issued by investment banking firm Jefferies Co., showed a growth rate of 300 percent over $8.3 billion in 2000.

Lowenstein also issued results of ISDA consumer surveys showing that nearly six out of 10 most frequent game players in U.S. households have been playing games for six years or more, and expect to play more or the same amount 10 years from now.

"Video games have the opportunity to become the dominant form of personal entertainment in the 21st century," Lowenstein said.

The survey also found that the core game player is 18 to 35 years old, the "tech generation." He called the 6-to-17-year-old generation behind them, "the first interactive generation in history," suggesting even stronger promise in the years ahead.

"The IDSA research found that the majority of most frequent players who have taken up video games in the last year are females, concrete evidence that more and more women are being drawn to games," Lowenstein said.

The greatest challenge ahead for the industry, Lowenstein said, will be "maintaining a high level of creativity and innovation." He pointed to escalating costs for game development approaching budgets of major motion pictures, and suggested that the tolerance for risk taking will inevitably wane.

This, he said, could lead developers to follow the path of Hollywood and depend more heavily on knock-offs, sequels and add-ons.

Still, he said, he believes game developers will continue to innovate and thrive off of the demands for originality from the gaming audience.

Another threat is piracy, which he said "obliterates the potential for a legitimate market for our products. Internet piracy is also a major irritant to the game industry. But progress has been made on the antipiracy front."