Future of consoles
iSuppli's research said mobile handsets will spur growth in the overall gaming market.
Commenting on the slowing of growth in the console market in recent years, the firm said the main consoles and handheld consoles on the market today have ‘reached a mature phase in their individual life cycles and have attained market saturation'.
iSuppli said consumers have been reluctant to buy or upgrade new gaming devices due to the high price points for current offerings, rumours of next-generation products and the current economic climate. In contrast, smartphone sales continue to flourish as they enjoy the advantage of broad penetration and have widespread use and appeal, according to the report.
However, Microsoft and Sony will hope their Kinect and Move motion-sensing peripherals will boost sales of the Xbox 360 and PlayStation 3 respectively, while Nintendo will be pinning its hopes on its new handheld 3DS which is expected to launch next year. Furthermore, the big three are predicted to roll out next-gen consoles as soon as 2012, raising revenues and unit shipments into 2014, when the console market is estimated to hit almost 60 units.
Experts predict next generation console functionality such as better multimedia services and web-browsing extras will allow them to evolve into entertainment centres and broaden their appeal.
The massively multiplayer online role-playing game (MMORPG) market has also experienced a slowdown in the West at the hands of the rapidly-expanding smartphone gaming movement.
However, a report from Strategy Analytics has found MMORPG will continue its rapid growth trajectory in 2010, buoyed by Asia.
The report said the market exceeded $5bn in 2009, with 17 percent annual growth driven by the momentum of Asian online game companies. It forecasted the market will reach $8bn in 2010.
"Faced with fierce competition from social games and console video games, MMORPG in the Western market has already shown signs of a slowdown. The traditional subscription model that most Western MMORPGs adopt has lost traction and growth momentum," said Martin Olausson, director at Strategy Analytics Digital Media.
Jia Wu, analyst in the Strategy Analytics Digital Media Strategies service, added: "Contrary to the flattening Western market, the Asian MMORPG market has grown immensely since 2007, due to the successful virtual items-based revenue model. As more Asian online game companies target US and European markets, they will become a formidable force in the global gaming industry."