• The PC is the largest single platform for games with annual worldwide revenue of about $11 billion. This is more than any of the console and portable systems from Sony, Microsoft and Nintendo.
• In emerging markets such as Asia and Eastern Europe the PC has become the de facto platform of choice for games as console systems have not had major penetration in most countries.
• Even in North America and Western Europe the PC is the leading single platform for games with over $6 billion in combined revenue from those markets.
• Broadband penetration has been a key driver of growth and revenue growth for PC games, and is directly tied to growth in broadband penetration.
• The three biggest trends in 2008 were 1) the growth of online digital distribution via services like Valve’s Steam; 2) the growth of free games with a virtual item purchase model and 3) the growing presence of game cards at major retailers like 7-Eleven.
• Top PC games regularly generate over $50 million at retail revenue but can generate substantially more in subscription and/or add-on revenue.
• Massively Multiplayer Online Games (MMOGs) are the leading products for both revenue and profi ts. Several Asian MMOGs are generating over $100 million in annual revenue after 5+ years on the market. World of Warcraft is generating over $1 billion in annual revenue. The Lich King expansion to World of Warcraft outsold its predecessor. In 2008, two major new subscription MMOGs (Warhammer Online and Age of Conan) sold over 1 million units at retail.
• Digital distribution, free-to-play models and retail game cards are well-established in Asia, but just starting to emerge in North America and Europe.
• Leading emerging markets for PC games include Russia/Eastern Europe, India, Brazil and Southeast Asia. These markets generally have very low (often less than 5%) broadband penetration, but are expected to grow substantially as the infrastructure improves.
• Low-cost PCs often have trouble playing high-end games, but they are helping drive growth in the mass market and emerging markets that can not yet afford high-end systems. These PCs are helping drive the casual game market.
• The trend in Western markets is toward portability and connectivity, with laptops outselling desktops, In addition, the major growth segment in laptops is under-$500 netbooks that are better suited for online casual games.
• Casual games have developed into an entire sub-segment led by large industry portals such as Electronic Arts’ Pogo, Yahoo, MSN, Big Fish, Real Networks and others. These top portals can now generate well over $100 million in annual revenue from casual PC games.
