Online console gaming report

A report released by Jupiter suggests that the success of online console gaming will be contingent upon broadband penetration in the US.

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Jupiter Media Metrix has released a report claiming that online console gaming will not be as popular as online PC gaming for quite some time. Jupiter believes that subscription revenue from online console games will reach $250 million annually by 2006, compared with $1.5 billion for online PC games. The report goes on to state that just 12.3 million of the projected 79 million households with game consoles will pay for online console gaming by 2006.

Jupiter analyst Billy Pidgeon believes that the number of online console players will be directly proportional to the number of households with a broadband connection. Current projections state that 23 percent of US households will have broadband connectivity by the end of 2001, and that number is expected to grow to 43 percent by 2006.

"The mainstream is getting more interested in the premium games, but they're mainly playing Web-based games like cards that have a chat component as well," Pidgeon said. "That's the big challenge, to get the casual gamer to buy games, both packaged goods and online games."

Jupiter also predicted that Sony will keep its number-one position in the console market while Nintendo and Microsoft fight for second place. According to Jupiter's surveys, the most important determinant for consumers buying a video game console is price, and the second most important determinant is exclusive games. Pidgeon predicts that console manufacturers will continue to purchase software developers to ensure exclusive content.

"It's definitely going to drive investment in first-party publishing," Pidgeon said. "We're going to see more investment by all three companies in software developers, and some of the publishers are going to be angling for better deals as far as developing games for specific platforms."

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