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Nielsen Report Finds Console Growth

7 Mar, 2007 By: John Gaudiosi

Despite the hardware shortages of PlayStation 3 and Wii, video game consoles have expanded in the United States by 18.5% between the fourth quarter of 2004 and the fourth quarter of 2006, according to a new report.

Consoles grew despite much slower growth in TV households, which have risen only 1.6% during the same period, according to the report, "The State of the Console," produced by Nielsen Wireless and Interactive Services, a service of The Nielsen Co.

In the fourth quarter of 2006 there were 45.7 million homes with video game consoles, representing 41.1% of all TV households, compared to 43 million (39.1% of TV households) in 2005, and 38.6 million (35.2% of TV households) in 2004, the report found.

“The video game console has become a major player in the battle for the living room,” said Jeff Herrmann, VP of Nielsen Wireless and Interactive Services. “In households across the country, consoles are successfully competing for consumers' time and attention; not simply as gaming platforms, but as multimedia hubs that also can deliver high quality digital movies and IPTV.”

By the close of 2006, approximately 148.4 million people had access to at least one video game console in their home, Nielsen reported. That represented more than half (52.4%) of the total U.S. television population. But the levels of penetration were particularly strong among key demographic groups. While more than two-thirds (67.%) of all men 18-34 had access to a console in their homes, the percent age was dramatically higher (80%) for men 12-17 years of age.

Most of these game households have access to an older generation of game console, as Sony has an installed base of more than 35 million PlayStation 2s in the United States (and more than 100 million worldwide).

The number of connected console households (those subscribing to a service that links their consoles to the Internet) has grown to more than 4.4 million, even before accounting for the connectivity of the PlayStation 3 and Wii platforms. (Microsoft has 6 million Xbox Live subscribers worldwide for its Xbox 360.)

Between Sept. 18, 2006, and Dec. 31, 2006, 93.8 million people used a video game console at least once for a minute or more. Moreover, in any given minute of the day, about 1.6 million people in the United States are using a video game console. The heaviest console users accounted for 74.4 % of all console usage and averaged 345 minutes (5 hours and 45 minutes) of usage per usage day during the fourth quarter of 2006.

Console manufacturers are seizing connectivity as a means to more multimedia ends for the video game console, the report said. Through connectivity, for example, Microsoft's Xbox 360 serves as an IPTV and movie download platform.

Even without connectivity, users are picking up on the basic multimedia capabilities of their devices. Over half (50.7%) of console users with a DVD player in their home identified their video game console as one of their DVD players. Meanwhile, the subsidized cost of the latest generation of consoles makes Sony's PlayStation 3 player one of the cheapest Blu-Ray players available on the market.

The Nielsen report incorporates extensive data on video game console usage from Nielsen's National People Meter (NPM) sample of television households as well as its quarterly Home Technology Report. This is the first in a series of studies from Nielsen examining trends in the video game industry.

The launch of Nielsen's GamePlay Metrics later this year will, for the first time, deliver metered video game usage and demographic data by game title, genre and platform. It will provide advertisers, agencies, hardware manufacturers and game developers with independent, high-quality, quantitative information for negotiating the buying and selling of in-game and around-game advertising.

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