DFC Predicts $100 Billion in Video Game Software Sales by 2018

Financial research firm DFC Intelligence has raised its 5-year video game forecast for the second time this year. DFC predicts that software revenue will climb from $64 billion in 2014 to $100 billion by 2018. This includes revenue from PC games, console games and mobile games, but does not include hardware spending on game devices.

"The market is growing on all fronts," says DFC analyst David Cole. "The new console systems are doing well but much of the predicted growth is on mobile platforms and in BRIC countries. What we are seeing is a game market in 2018 that is likely to be split fairly evenly between console, PC and mobile platforms."

DFC forecasts that mobile game revenue will climb from $10 billion in 2013 to $29 billion in 2018, representing around 30 percent of total game software revenue.

"The challenge with mobile games is that even as it grows it remains very fragmented and overcrowded. Companies need to be very cautious about their platform strategy and understand which markets and platforms are suitable for their particular product," said DFC analyst Jeremy Miller.

Interestingly enough, DFC Intelligence has raised its forecast for the Sony PlayStation 4 and Nintendo Wii U and lowered its forecast for the Microsoft Xbox One. According to David Cole, the main challenge the console systems face is expanding beyond their core market.

"The Xbox One should carve out a solid share among dedicated action gamers, but due to some questionable business decisions Microsoft's broader entertainment strategy is in disarray despite the release of the new $399 Kinect-less SKU."

DFC believes that the PlayStation 4 will be the leading game system over the next few years.

"The main question is can Sony continue to build on initial PS4 sales to build an installed base similar to what they had with the PlayStation 2," said Cole.

DFC also announced that later this year they will be releasing a new hardware forecasting service.

"We are now tracking hardware and software spending separately. Core gamer spending on high-end PCs, dedicated game devices and accessories is starting to soar. When you add in mobile devices the impact of the gaming consumer on total hardware spending is huge," said Cole. "The influence this spending will have will have a bearing on all major players in the consumer electronics space."

The new forecasts are part of DFC Intelligence's Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry service.

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