Consumer Software market skyrockets to $2.6 billion in 1995; Education/edutainment, home productivity segments grow more than 100 percent.

FRAMINGHAM, Mass.--(BUSINESS WIRE)--Jan. 29, 1996--The consumer software market exploded to $2.6 billion in revenue, an 82 percent increase over 1994 as consumers continue to incorporate computing into their personal lives, according to year-in-review research released by International Data Corporation (IDC).

Growth in the consumer market in 1996 will be hampered by a slow down on the hardware side of personal computers going into the home. According to IDC's PC Hardware Program, shipments of new PCs into the home have slowed as the PC- literate segment of the home market has become saturated. Dramatic growth of consumer software will be contingent on hardware making in-roads into new segments of the home market.

In addition to stable growth in the games and entertainment segment, the education/edutainment and home productivity segments grew nearly 143 percent and 122 percent, respectively. By the end of 1995, games and entertainment will represent 38 percent of revenue earned, followed closely by home productivity with 33 percent and education/edutainment with 29 percent.

"A second stage of evolution is underway in the consumer software market as established vendors work to diversify their product lines," said Mary Conti Loffredo, IDC research manager. "In a market fueled by selection and choice for users, the introduction of Windows 95, the Internet and additional strategic partnerships provide companies growth opportunities in 1996."

Key Market Trends

o Acquisitions vs. Mergers

The late fall hostile take-over attempt of the Learning Company from Broderbund by Softkey International will likely typify the consumer software market over the next 12 months. IDC expects the majority of the acquisition activity in the next year to take place among the leaders and smaller companies rather that mergers among smaller companies.

o Windows 95

As the introduction of Windows 95 is fueling first-time purchases in the consumer market, development of Windows 95-based products is key to the coming year's product line. There will be a holiday season `hang over' in Q1 of 1996 as new hardware boxes are populated with software and the holiday shopping season is extended with the releases of new Windows 95-based products.

o The Internet

The Internet's impact on consumer software and how it is sold will be an area of evolution over the next 12 months. IDC is closely watching two specific areas of consumer Internet opportunity: products that exploit the Internet and using the Internet as a distribution channel. As the Internet becomes more mainstream, demand will emerge for products that enable more than just connecting to and "surfing" the Internet. The Internet is also affording companies the opportunity to mine the installed base of existing customers as well as capture new clients.

For additional information on IDC's report, "1995 Preliminary Consumer Software Market Year-in-Review" (IDC#10941), please call Cheryl Toffel at [phone].

About IDC

International Data Corporation is the world's leading provider of information technology data, analysis and consulting. With research centers in 40 countries and more than 300 research analysts worldwide, IDC is uniquely positioned to provide a global perspective on IT market and technology trends.

IDC's subsidiary, IDC/LINK, specializes in the convergence of the information, telecommunications, personal computing, and electronic entertainment industries

Based in Framingham, Mass., IDC is a subsidiary of International Data Group (IDG), the world's largest publisher of computer-related information and the leading global provider of information services on information technology. -0-

Note to editors: revenues for the games category are exclusive of any proprietary game revenue such as those earned through cartridge sales by Sega and Nintendo.

IDC's sizing of the consumer software market represents revenue for PC-based titles only.

All product and company names may be trademarks or registered trademarks of their respective holders.

CONTACT: IDC

Patrick Gorman, Group Marketing Specialist

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Hillary DeMello, Press Relations Manager

508/935-4282

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