Game sales to hit $81 billion by 2016 - Analyst

As the game industry has shifted from retail to digital distribution in recent years, it has become harder to accurately gauge whether the market is growing or shrinking, and by how much. However, according to DFC Intelligence, total game-industry sales will continue to explode in the coming years, growing from $66.6 billion in 2010 to $81 billion by 2016.

DFC Intelligence's forecast, which was announced this week as part of its annual Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry report, factors in myriad sales channels. These include revenues from dedicated console and portable hardware and physical and digital software. The firm's figures also include software sales on platforms where gaming isn't the primary use, such as mobile phones, tablets, and music players.

"Overall the game industry is becoming more diversified and global as it continues to grow," said DFC Intelligence analyst David Cole. "This makes the industry challenging because it is hard to know where to place one's bets. At the same time, there are many niches of opportunity that didn’t exist in the past."

According to the report, the largest area of growth is from online sales. Revenue from online PC, console, and mobile games is expected to grow from $19.3 billion in 2010 to $37.9 billion in 2016. Retail, on the other hand, has seen a definite slide. Following its peak in 2008 of $58 billion, global retail sales are expected to steadily decline to $43 billion by 2016.

"On a global basis it looks like retail delivery of physical software peaked in 2008," Cole said. "We expect a slow, steady decline for physical game sales, with a steady increase for online delivery of games and new business models such as subscriptions and virtual item sales." DFC Intelligence expects online business will surpass retail beginning in 2013.

DFC Intelligence has been offering far-future forecasts for the game industry for years. In 2006, the analyst group predicted that global game-industry revenues would reach $44 billion by 2011. As mentioned above, that figure was easily surpassed in 2010, when total global sales were $66.6 billion, according to DFC's figures.