Going back to the mid-1990s, DFC Intelligence has focused on the concept of "anytime, anyplace, anywhere" as a key driver of growth for the video game business. "Anytime, anyplace, anywhere," along with concepts like "Nintendo Dads," and the "user pyramid," have been useful tools for both forecasting industry growth and explaining to a skeptical investment community why the interactive entertainment industry has substantial growth potential.
At a high level, DFC divides the game market into three broad segments: hard-core consumers, moderate consumers and mass-market (or casual consumers). Of course, the market is much more complex than this basic analysis. Hard-core consumers can be further subdivided into hard-core PC gamers and hard-core console gamers. These are two very different types of consumers. These groups could be further divided into such segments as hard-core simulation gamers, hard-core FPS gamers, hard-core fighting gamers, hard-core Nintendo fans, etc. However, before understanding these smaller sub-segments, it is important to understand the broader classification of gamer types.
The most important point to note is that there is little movement between the groups. Think of it as a pyramid, with the mass-market gamer at the base and the hard-core gamer at the pinnacle. The majority of gamers will be at the bottom. As a general rule of thumb, about 50-75% of the game-playing population sits at the base in the mass-market gamer category. Somewhere between 15% to 30% are in the moderate gamer slots and the rest are the hardcore gamers. Of course, it will vary by type of product and market, but as a general rule of thumb the pyramid theory should apply to most analysis.
The challenge is trying to get movement among the groups. It is very hard to take an established mass market gamer and make them a moderate or hard-core gamer. However, that is not to say that the overall pyramid is not growing. DFC's entire forecast for the interactive entertainment industry is based on the premise that the overall pyramid is growing. However, this growth is occurring slowly over time. It is really a slow demographic change that can take years.
This is where concepts like "Nintendo Dads" come into play. In the 2004-2006 timeframe, DFC did some analysis for some large institutional investors that were concerned for the future of Nintendo. Of course, at the time Nintendo was really struggling and many thought they should exit the hardware business. On the contrary, our analysis argued that demographic trends actually looked strong for a Nintendo resurgence starting around the time of the Wii launch (late 2006/2007).
We described this resurgence as being led by a group we labeled “Nintendo Dads.” This is a moderate to mass market user base that was familiar with Nintendo products from childhood. This type of user base would supplement Nintendo’s traditional strength with their hard-core fan base and consumers in the under 14 year-old market. Nintendo Dads are consumers that grew up with Nintendo and are now having children of their own. In the 128-bit generation (Xbox, PlayStation 2, GameCube, Dreamcast), the video game market saw a growing number of parents (usually dads) actively play the game systems with their children. We think that this trend really helped Sony and, to a lesser extent, Microsoft. The PlayStation 2 had products to appeal to the whole family, whereas the GameCube content was specifically targeted towards a younger audience. More importantly, parents for the 128-bit generation of systems were not as familiar with the Nintendo brands.
Back in 2005, we used the example of a 33-year-old dad:
"Look at a 33-year-old dad buying a system for both himself and his 6-year-old son. In 2002, this dad would have been born in 1969 which would have made him 18 when the NES took-off around 1987. Back then, 18-year-olds did not play video games in large numbers. Instead, this dad would most likely have cut his teeth on something like the Atari 2600. The Nintendo name would not have meant much to him. Go forward to 2007 and this 33-year old would have been 13 in 1987 and would probably have been very familiar with Nintendo and its characters like Mario and Zelda. A 33-year-old dad in 2007 becomes one of the first generation of parents personally familiar with Nintendo products and thus possibly inclined to buy a Nintendo system for his children. Consumers in their teens and twenties tend to distance themselves from the products of their childhood, but such concerns over 'being cool' can start to disappear with age, replaced by nostalgia. This trend alone, which Nintendo is well aware of, could really benefit Nintendo going forward. Thus, they are putting a big emphasis on the nostalgia card and focusing on their historical software library, as well as games that have cross-generational appeal."
Adults playing games has been the biggest growth driver for the game industry. Obviously, this starts to benefit companies like Nintendo that have brands that were popular 25 years ago. But also playing into the growth equation is what we call the concept of "anytime, anyplace, anywhere." DFC started talking about anytime, anyplace, anywhere in the mid-1990s to explain to nervous investors why the video game market was nowhere close to saturation. At the time, the argument was that you could only sell so many games to 10-year-old boys crowded around a TV set. In the mid-1990s, most people over the age of 40 had never played a video game and the thinking was that the industry was a fad for children.
