Nintendo is gaming, Sony/Microsoft are questionable.

[theRepublic]

WereKitten said:

@theRepublic
Thanks for finding the presentation, I was wondering about this "shrinking market" idea.

No problem.

- it's dated 2005

Yeah, I would like to see how the numbers for this generation look.

- I see a big difference between "household penetration" and market, and anyway the household penetration ratio seems practically constant. Even considering that multiple consoles owned inside a same household bring less software sales than the same number of consoles sold to less related customers, the absolute number of software sales are going to increase as a constant percentage of households means a growing absolute number of them.

Thus I can't really say how this translates to a "shrinking market" in any way, not hardware nor software-wise. What can be said is that it hints to a bigger potential market.

I wouldn't call it shrinking, but looking at it like this I would call it somewhat stagnant.  When the population stops growing, so will video games if it continues like this.  That is a long term concern though, and possibly really really long term.  I think you are right, in that it definitely means there is a bigger potential market, which is probably why Nintendo went the direction they did with the Wii and DS.

- It highly depends on how the "penetration" thing was measured, ie what constitutes a "household". What about consoles in college dorms, for example? How are they counted? Was this a poll over a pre-defined set of households, or was it made on an individual basis? I know several of my friends had a console back at parents' and a console with their house-mates where we attended university, while others only had one back home or one that they moved all the time.

No clue on methodology.  It would be nice to have.

- this is US only. I'm pretty sure that the penetration of 8-bit and 16-bit era consoles was lower in Europe and has seen a way greater increase in following generations, especially since the PS1 onward. No, I don't have the hard numbers, I hope every reader who was there finds this reasonable.

I think a lot of the growth that video games have seen has been in the expansion to new markets.  Nintendo's main focus was Japan and the US during the NES and SNES.  Sony did a lot to popularize consoles in Europe with the PS1 and PS2.  I'm sure in the future there is a lot of growth to be had in South America and Asia.  On the other hand, it is both interesting and useful to see the historical progression of an established market like the US.