International market research firm Newzoo has launched an alternative way of segmenting the games market.
The model incorporates fresh data on 153 million American gamers and their $21.9 billion estimated spending on games in 2012. The starting points of the new segmentation are the consumers and their typical four screens, each fulfilling a separate consumer needs. Contrary to the traditional segmentation, the model is designed to stand the test of time and show cross- and single-screen growth opportunities. Already 22 percent of all American gamers, or 34 million people, use all four screens to play games.
All types of games are moving towards the cloud, relying on in-game sales for revenues and are increasingly accessible via multiple screens. Current market segmentation is based on definitions and terms that are subject to continuous change. In addition, the overlap between the traditional segments is constantly growing. When it comes to reporting on the past or a small part of the games business, the segmentation can still work, but this approach is not suitable to keep track of the total picture or to identify future growth opportunities.
Peter Warman, Newzoo CEO, adds: ”We have been first in researching and reporting on all game platforms and business models on an international level. As traditional market research companies attempt te get a grip on the online and mobile business models, we are taking the next step. Our clients need to look ahead and our new approach is aimed at inspiring our clients and sizing concrete opportunities in a way that still makes sense in five years. Naturally we will, in parallel, keep segmenting the market in the traditional way.”
The Screen Segmentation model distinguishes four types of screens: the Computer, Entertainment, Personal and Floating Screen. According to this new model, each of the four screens plays a different role, yet all of them are firmly present in consumers’ lives and therefore continuously used. Consumers can interact or be entertained anywhere and at any time. Based on the use of the screens, tablets are grouped with handheld consoles and not with smartphones, as traditionally done for the “mobile gaming” market segment. The growth in mobile gaming is therefore fueled by the uptake of two different screens, each having their own right of existence. Thirty-one percent of Americans now have their TV connected to the Web. As apps enter the TV space, the interactive use of this screen will continue to grow, justifying the term “Entertainment Screen.”
Based on fresh 2012 research and trending data, the infographic shows 2012 estimates for the number of players, time spent, number of paying gamers and money spent. As no game genre or platform has more than 50 percent paying gamers, conversion is key to any game. Reports that show only revenues do not reflect the market situation. They also limit the ability to predict future opportunities, as growth starts with the uptake by consumers, regardless if they spend money. After that, players begin to spend more time, then start paying and ultimately spend more. The infographic shows the absolute figures and relative shares of these four key trend indicators for each individual screen.
Already 22 percent of American gamers use all four screens to play games. Amongst the 84 million paying gamers, this share rises to 31 percent. Europe shows slightly lower shares: 21 percent of gamers and 27 percent of paying gamers, still a significant number of consumers. It is not surprising that game companies are offering access to their games via multiple screens. The PC Screen attracts the highest share of gamers, 91 percent, and money spent, 51 percent. The difference between share of gamers and share of money is highest with the Personal Screen: 59 percent versus 8 percent, pointing to growth. The data also indicates that the TV or Entertainment Screen has opportunity for growth, but only when business models catch up with the other screens and available game genres become more balanced. Narrowing down to company or game-specific opportunities requires further segmentation per screen in business model, distribution method, demographics, genre preferences and payment methods.