Xbox Live Set to Grow Big

[Justin Buser]

In-Stat has provided some figures for online console gaming by way of a recent report, which also says that Xbox Live could grow by around 50% annually between 2004 and 2009, and that Sony does not have a paid online service because it believes it is too much of a barrier (note to Sony - see Xbox Live).

Video game consoles and handheld game consoles are greatly expanding the market for online gaming, reports In-Stat (http://www.in-stat.com). Worldwide console and handheld online gaming subscribers numbered 3.4 million in 2004, and could exceed 30 million by 2009, the high-tech market research firm says. Whether Sony continues to offer free online console subscriptions or goes to a paid subscription service when it releases the PlayStation 3 in 2006 will have a big impact on subscriber growth and revenues over the next few years.

"Microsoft is the only console maker so far to launch a paid subscription service," said Brian O'Rourke, In-Stat analyst. "And we expect the release of the Xbox 360 and additions to its subscription service to accelerate Microsoft to just under 50% annual subscriber growth between 2004 and 2009."

A recent report by In-Stat found the following:

-- Sony currently believes that a paid service is too large a barrier to console online gaming, and uses free online play primarily to reinforce customer loyalty.

-- Nintendo has taken a hands-off approach to online console gaming thus far, but is taking a very aggressive approach in handheld console gaming, setting up a network of Wi-Fi hotspots in Japan, North America and Europe to host its free DS online service.

-- Sony has launched several networked gaming titles for its PSP handheld console in 2005. However, Sony has not been as active as Nintendo in setting up hotspot networks or marketing the online service.

The report, "Console and Handheld Online Gaming: Overshadowing the PC" (#IN0501852CM), contains forecasts for online gamers annually through 2009 for game console and handheld units. Forecasts for each console include: annual installed base, number of subscribers, subscriber revenue (where appropriate), and additional revenue garnered through paid downloads. Analysis is provided for console online strategies of Sony, Microsoft and Nintendo, and handheld online strategies of Sony, Nintendo and Nokia. Please note that this report does not forecast PC online gaming.

About In-Stat

In-Stat (www.in-stat.com) is the leading provider of actionable research, market analysis and forecasts of advanced communications services, infrastructure, end user devices and semiconductors. Our insights are derived from both a deep technology understanding and comprehensive research, which examines each segment of the value chain for each market. Technology vendors, service providers, technology professionals and market specialists, worldwide, rely on In-Stat's tenured, experienced staff and in-depth research to support critical business, product and technology decisions.

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