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Broadband Will Drive Online Console Gaming

2/9/2002

Amsterdam, Netherlands - 09 February, 2002 (PRN):For the next 12 months, Europe will be awash with hype touting the application possibilities of extremely powerful and flexible next-generation consoles. But according to a new Technographicsｮ report by Forrester Research B.V. (Nasdaq: FORR), only online games will gather enough momentum as a new application for consoles.

"Applications like Web access and consumer electronic device hubs for digital cameras, MP3 players, and PVRs have all been proposed as areas where next-generation consoles could win," said Forrester Technographics Analyst Paul Jackson. "But despite the wealth of potential applications, only online games will succeed in taking the devices beyond what previous consoles can do. Today, the only noncore console functions used by a significant number of consumers are CD and DVD playback, and consoles will have difficulty expanding on this early success. Game consoles' primary purpose has been the presentation of compelling gaming content, and consoles are designed around a TV output device, an ergonomic joypad input device, and ease-of-use -- that will not change."

Forrester asserts that the success of online game offerings will be driven by entertainment-focused "technology optimists" who exhibit a high propensity to adopt broadband. Crucially, online console gaming will rely on fast, always-on broadband connectivity. This synergy will increase during the next three years as both technologies become more affordable, leading to 10 million European households having the technology to play online games via console by 2006. The number of multiconsole households will be small in 2002 because of high hardware prices and a lack of compelling game titles, but it will grow to account for 30% of sales by 2005 and 2006.

"Three distinct phases in the development of online console games will emerge," Jackson added. "For 2002 and the first half of 2003, manufacturers will focus on selling the base console, compelling game bundles, price reductions, and the continued promotion of 'better-than-ever' one-player games will all stimulate consumer interest. For the second half of 2003 and 2004, attention will move to connecting the broadband network with consoles. By 2006, 24% of European households will have broadband access -- 41% of online households -- and next-generation consoles will be among the first non-TV devices (along with PCs) to plug into broadband. The online gaming explosion will occur in 2005 when 12.7 million households will have the necessary technology to play online games."

The report "Game Consoles Connect" drew from Forrester's Consumer Technographics Q2 2001 Europe Devices & Access Study, fielded in seven European countries by means of consumer mail panels of 22,825 adult respondents. The seven markets are France, Germany, Great Britain, Italy, the Netherlands, Spain, and Sweden. Forrester augmented this with data from its Consumer Technographics Q4 2001 Europe Devices & Access Study, which had 26,149 respondents in the same seven markets. Forrester also took data from the wider Q2 2001 Europe Benchmark Study, fielded in 13 European countries by means of consumer mail panels of 29,354 adult respondents. The 13 markets are those above plus Austria, Belgium, Finland, Ireland, Norway, and Switzerland.

Forrester Research is a leading emerging-technology research firm providing data and analysis that defines the impact of technology change on business. Forrester's WholeView� Research, Events, and Strategic Services help Global 3,500 clients understand how technology change affects their customers, strategy, and technology investment. Established in 1983, Forrester is headquartered in Cambridge, Mass.

For additional information, contact:

Clive Savage
European PR Manager
Forrester Research B.V.
Tel: +31 20 305 4868
http://www.forrester.com

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