DFC Intelligence Announces New Study Forecasts Strong Sales for Video Game Industry.

Business Editors/High-Tech Writers

SAN DIEGO--(BUSINESS WIRE)--Aug. 6, 2001

A new report from DFC Intelligence forecasts that the new generation of 128-bit video game systems will have combined U.S. sales of over 60 million by the year 2005. According to David Cole, president of DFC Intelligence, "the video game industry is poised to reach record sales levels over the next few years." Overall, DFC forecasts that total U.S. revenue for interactive entertainment will exceed $12 billion by 2003, a 50% increase from 2000 revenue.

The report forecasts individual sales for each major hardware platform under three separate scenarios. "We believe that over the next few years consumers will be spending a great deal of money on video and computer games. However, there is still a great deal of uncertainty about exactly which game systems will do well," said Cole. Under most scenarios, the Sony PlayStation 2 is forecasted to be the leading system. According to Cole, "the PlayStation 2 has the potential to be the best-selling game system ever."

However, the report also contains scenarios where the PlayStation 2 faces significant competition from the Nintendo GameCube and Microsoft Xbox. "The GameCube has a major price advantage and Nintendo's strong software brands. Nintendo has a solid chance to once again be the market leader." The DFC report does not forecast the Microsoft Xbox to be the market leader. However, according to Cole, Microsoft has a solid chance to become a major player in the video game market.

The new forecasts are part of an update to the 700+ page report The U.S. Market for Video Games and Interactive Electronic Entertainment. The full report contains complete forecasts to the year 2005 for video game hardware and software, PC games, and portable game systems including the Nintendo Game Boy Advance. The report also provides a historical perspective, a discussion of industry business models, an overview of distribution and marketing and a look at consumer tastes and software genres.

DFC Intelligence is a research firm focused on interactive and digital entertainment. DFC also publishes The Online Game Market 2001, The State of Game Technology, Interactive Broadcast Video: Streaming Video Market 1998-2004, Streaming Ad Insertion and Commerce Report and the DB&P/WebcastTrack research service. For more information contact DFC at 858/780-9680 or go to the DFC web site at www.dfcint.com.