Game-Console Penetration To Fall Below 50% By 2019

Update! Smart TVs, mobile devices, VR headsets to take its toll, Parks says
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Sony’s planned PlayStation VR headset could help expand the market for Sony’s game console.

The number of broadband-connected households with a game console will fall to less than 50 percent by 2019 from today's 58 percent, thanks to the growth of gaming options on platforms such as smart TVs, media streamers and mobile devices, Parks Associates said.

Virtual-reality headsets also promise to take a toll, given that VR headsets announced to date — save for Sony’s PlayStation VR for the PlayStation 4 — are intended for use with gaming PCs or cellphones, Parks said.

By 2019, game-console unit sales will have fallen for almost 10 years, Parks said.

"Console makers have always known that the highest ongoing revenue potential is in content, whether that is physical media, Cloud-based game streaming or streaming-video content," said Barbara Kraus, Parks research director. "While sales of traditional gaming consoles are declining, TV and streaming-media player makers are focused on increasing gaming through their devices. PlayStation Now is streaming games through select Samsung TV models. {And] Apple TV, Amazon Fire TV, and Nvidia Shield are focused on providing high-performance, high-quality games with an eye towards increasing the size of the gaming market."

With the competition in mind, console makers are experimenting with new form factors, and Nintendo's next model could serve as both a home console and handheld device, Parks said.

VR impact: The gaming industry is looking at VR as a potential disruptor that could generate new and heightened interest in gaming, Parks said. "Gaming is the major initial use case for VR, but this innovation could be disruptive enough to attract a much broader audience. Sony is aware of its immense potential, as the company has dropped hints its VR set will be compatible with devices other than its PlayStation so that its device won't be locked to one platform."

See also: New VR, AR Solutions Come Into View

For now, however, the only gaming console to support VR will be Sony’s PlayStation, she said. The Oculus Rift and HTC Vive are PC-based. And Samsung's Gear VR is only compatible with Samsung Galaxy smartphones and not with any model prior to the Galaxy 6 model, she noted.

Meantime, consumers spend more time playing games on computers than on gaming consoles, and almost as much time playing games on smartphones as they do on consoles, Park research shows. (See chart below.)

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