Gaikai to Dominate Cloud Gaming, Steal Growth from Consoles, says AnalystPhysical software sales have been in decline, and it's not clear if or when they'll pick up again. EEDAR analyst Jesse Divnich forecasts that the HD gaming market will remain essentially flat through 2015, in part because cloud gaming firms like Gaikai will be taking away any potential growth from consoles, he told IndustryGamers.
"Gaikai we truly believe will be the dominant company delivering cloud based games in the future. The reason why the traditional HD gaming market will be flat through 2015, and not grow as it has done since 2001, is that companies like Gaikai will steal growth away from the traditional packaged goods HD market," Divnich noted.
"We continue to project that interactive entertainment as a whole will consistently grow through 2015 at a rate of 4 to 8% a year. That incremental growth is what Gaikai will be capturing, and when we take into consideration that interactive entertainment will grow $20 to $40 billion over the next 5 years, that is a lot of dough on the table for companies like Gaikai to capitalize on—and they will."
As for Gaikai's prediction this week at CES that one of the current console manufacturers will bow out of the race for next-gen, Divnich remarked, "It is very true that the industry is not expecting any double digit growth over the next five years for traditional HD gaming, but that doesn’t mean technology, innovation, and new hardware will halt. We are talking about a $25 billion a year software industry, worldwide, and even if this category remains flat, that is still $25 billion up for grabs, per year, through 2015. I am sure Microsoft, Nintendo, and Sony can make the economics work—for the most part they are now. I guess one could theorize that the HD market could only support two major platforms—I’d still argue three—but I think at the very least two can remain profitable and competitive."
