dfc-intelligence posts

The state of PC gaming, at least in terms of its total revenues, continues to grow. That's the findings of the non-profit PC Gaming Alliance who revealed the preliminary findings of its third annual Horizons report as part of GDC 2011. The report, created with the assistance of DFC Intelligence, claims that global PC game revenues were $16.2 billion in 2010, a 20 percent increase from 2009.

While China is both the fastest growing and largest market for PC gaming, the study claims that all regions of the globe showed revenue growth in 2010, including the US. The advent of digital downloads for large PC games and games that use microtransactions and point cards are among the reasons for revenue growth. The PCGA states that it predicts revenue growth will continue in the industry, reaching $23 billion by 2014. The full Horizons report will be revealed to PCGA members next week.

While free-to-play games have been staples in Asia for some time its only been in the last few years that client-based free-to-play PC game titles have really started to gain traction in the US and Europe. Today the strategic market research firm DFC Intelligence announced that client-based English language free-to-play games generated $250 million in revenue (presumably by optional micro-transactions and subscriptions) in 2009 and that number is predicted to shoot up to $2 billion by 2015.

While the study claims that the free-to-play game business has not taken off as quickly as first expected by Korean-based publishers, "this is starting to change and consumers are starting to realize that the game play of top high-end F2P games can be quite sophisticated." DFC claims that by the end of 2010 there will be 128 million registered users for English language free-to-play games and that the conversion rates are "fairly high."

While the PC gaming industry is losing revenue in terms of titles sold in brick and mortar retail stores, it has been gaining in downloadable game sales. It also has been generating revenue in another way via the purchase of in-game items from free-to-play online titles. Now a new study claims that the purchasing of virtual goods in games will expand rapidly in the US.

The study comes from DFC Intelligence which worked with MMO in-game item seller Live Gamer to survey nearly 5,000 games in the US and Europe earlier this year. The survey revealed that 88 percent of the respondents said they had purchase some kind of digital download item and that 60 percent said they have bought an in-game item that was not a full game. DFC believes that free-to-play online games with in-game items as their revenue model generated $800 million in 2009 in the US and Europe. DFC predicts that number will grow to $3 billion by 2015.

Launched two years ago at GDC, the non-profit group the PC Gaming Alliance has been trying to both study the PC gaming industry as well as suggest improvements to help expand. Today the organization announced the results of their 2009 Horizons report, a research study on PC gaming revenues. The press release that announced the results showed a 3 percent increase in worldwide PC gaming revenues in 2009 with a total of $13.1 billion.

That number doesn't just contain sales of games at brick-and-mortar stores. In fact those sales actually declined in 2009 and now cover less than 20 percent of all software-based revenues. Digital distribution of PC games made up the difference. Other sources of revenue for their numbers came from monthly subscriptions for online games, sales of virtual items and sales of ads for gaming web sites. While revenues in the US and Europe were down between 10 and 15 percent in 2009, the still growing Asian market made up for the difference.

Valve's head man Gabe Newell mentioned earlier this year that sales of their games tend to spike when they have price cuts on Steam. Now a new study seems to confirm that player activity for their zombie shooter Left 4 Dead has gone up for the PC version compared to the Xbox 360 port of the game.

Gamasutra reports that a new study from DFC Intelligence and the social networking site GamerDNA shows that player activity for both versions of the game were more or less the same until Valve held a 50 percent sale of the PC version on Steam in February. PC player activity went up and then leveled off but still was somewhat higher than the Xbox 360 version.

In late April the free Survival Pack was released for both platforms and while both the PC and Xbox 360 experienced spikes in player activities, the PC version went even higher thanks to a "Free to play" weekend that the Xbox 360 version could not duplicate. Since then the PC version has continued to be much higher in terms of player activity than the Xbox 360 port.

The non-profit PC Gaming Alliance was formed just over a year ago and today the group of game publishers and PC hardware companies offered up its report on the state of the PC game in the past year of 2008. The report, which was created with the help of DFC Intelligence, is now available to download (in PDF format) at the group's official web site.

Some of the highlights of the report are as follows:

• The three major trends in PC gaming in 2008 were the increased use of downloadable game services, the rise of free-to-play games and the introduction of PC game cards in retail stores.
• Worldwide PC game revenues came in at $11 billion, more than any of the console and portable game systems.
• Eastern Europe and Asia have seen the PC become the main source for games but North America and Western Europe still generated a total of over $6 billion in revenue from PC games
• Masssively multiplayer games generate the most revenue and profits for PC titles with a number of Asian MMOs generating over $100 million in annual revenues even after being on the market for over five years. World of Warcraft alone generated over $1 billion in revenue.
• While low cost PCs can sometimes not run a number of PCs games they do drive growth in casual games and also in markets that cannot afford high powered PCs.

According to data extracted from numerous reports, DFC Intelligence forecasts an estimated $57 billion dollar revenue for the games industry in 2009.

"Consumer spending on software is at record levels and the game business seems to actually benefit from a recession because games are a relatively cheap form of home entertainment," said DFC analyst David Cole.

Cole goes on to state that the reports summarize sales predictions for each platform, and that the Nintendo Wii "does not appear to be a fad and it has the chance to be one of the best selling systems of all-time." Software sales for Sony's PlayStation 3 are estimated to match those of the Wii by 2012, and the Xbox 360 "remains a leading player in some of the top markets, most notably the U.S. and U.K."

Not surprisingly, the PC was the top gaming platform in 2007, with $7 billion in sales not including retail. "Total PC game revenue is expected to reach $19 billion by 2013," according to the DFC.