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Analyst: $26 billion game industry in 2008

DFC Intelligence projects minimum 44 percent revenue increase in next three years regardless of next-gen console wars.


In an interesting move, DFC Intelligence analyst David Cole has run what he thinks are projected revenue numbers three ways, depending on which next-gen console--the Nintendo Revolution, the Sony PlayStation 3, or the Microsoft Xbox 360--becomes the dominant console of the next hardware generation.

While he declines to offer a clear view of the three outcomes, he does commit to minimum growth, regardless of the sales champ. Cole says the game industry is in line to go from its current baseline figure of $18 billion in software sales worldwide (in 2004) to $26 billion in 2008--a minimum 44 percent increase in revenues.

"With a true worldwide marketplace and increasing ownership of multiple systems, this is not a winner-take-all situation. Instead, it is about how profits can be maximized across the unique installed base of different console, portable, PC, and location-based platforms," Cole said in a statement today.

Cole does, however, show his cards just a bit. While saying there is room in the marketplace for all three consoles, the PlayStation 3, according to Cole, is the likely heir to the console throne. "PlayStation 2 raised the bar on what a game system can do in terms of sales. Until Sony makes a major mistake," Cole said, "we have no reason to believe they will not continue that success with the PlayStation 3."

Just last week, analysts at PricewaterhouseCoopers projected the worldwide game industry revenue (revenues from hardware, software, and peripherals) to increase from $25.4 billion in 2004 to $54.6 billion in 2009.

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