The Big Four

Contrary to popular belief that young males dominate gaming industry, it has been found that females account for 39% of the market, and the average age of game players is 29

Playing the eternal Gypsy and sooth sayer, I have listed four revenue growth
scorchers of the next few years. These streams are gathering momentum and will
leave many other popular industries behind. These are international growth
stories and the Indian trends may not be the same. Nor is it recommended that
they should be the same!

First is Online Gaming. Estimates by research groups predict that worldwide
online gaming revenue for 2004 would be to the extent of $1.4 billion. Revenues
are expected to triple by 2007 and players like Yahoo, Real Networks and CNET
are coming on strong. In the Asia Pacific region, online gaming revenues is
expected to reach $1.8 billion by 2008 as per latest IDC estimates. With growing
users of the Internet, more and more gamers are getting their thrills online.
Puzzle, board games, game show and card games are the popular categories and
money-spinners. Much of the games industry is now focused on multi player online
games (MMOGs) such as Everquest, Dark Age of Camelot and Star Wars Galaxies.
Pay-per-play browser games where users pay to enter skill based competitions for
some cash or other prize is the fastest growing sub-sector. It is expected to
grow at a CAGR of 40% till 2007.

Second is the net-based adult content industry. Pornography, the age-old
industry is huge by itself. In 2003 it was estimated to have grossed $57.0
billion worldwide and $12.0 billion in the US. This estimate includes adult
videos, escort services, magazines, clubs, phone sex, cable/pay per view, CD
Roms, Internet and others. Amongst these Internet is estimated at $2.5 billion
and growing. In fact with Internet and other advances in technology, adult
content has become even more lucrative. Some of the new technologies adopted by
the operators are: (a) wireless services-according to estimates, wireless adult
content could generate $1 billion to $6.5 billion in the years to come. New
technology will permit swapping pictures, browsing the web, instant messaging
and streaming video all in one phone. As connectivity and picture quality
improves, operators will provide streaming videos for the small screen (b)
video-on-demand billing- this include an electronic billing system which will
allow consumers to download and record chunks of content on CD’s. Consumers
will be charged by the minute (c) geo-location software which lets web sites
identify the city where a person logs on. That lets operators target Internet
promotions to specific consumers in specific regions. We can safely predict that
technology-induced ease-of-service, privacy and insatiable demand will translate
to more and more dollars.

Third is the online advertisement industry. With business through the
Internet growing day-by-day online advertising is taking big strides. The amount
of money spent on Internet advertising was to the extent of nearly $2.3 billlion
for the first months of this year. IDC predicts that in the Asia/Pacific region
alone, online advertisement revenue is expected to grow at a CAGR of 39.8% over
the next five years-from $ 304.3 million to $1.62 billion by 2007. Push ads like
banners, buttons, sponsorships etc are now the dominating segment on the
Internet. Pull ads like search ads, classifieds, and permission marketing/e-mail
marketing are growing rapidly. This segment is expected to grow faster and reach
51.3% of the overall online ad revenue.

The fourth major revenue earner is the search industry. Interactive and
intelligent search will drive this growth. Estimates about the size of this
business vary from $5 billion to a more optimistic $8 billion worldwide in 2007.
The main sources of revenue for the search industry will be search based online
advertising, aided electronic commerce – where search engines become virtual
stores, and of course subscription and technology services. As search engines
throw up more and more ‘relevant’ information, it is possible that consumers
would be willing to pay for the results.

Whichever way we look at it, search will be one of the major revenue earners
of the future. Significantly there is little talk about any of these in India.
Maybe because there is no outsourcing involved!

The author is Editor-in-Chief of CyberMedia, the publishers of Dataquest
He can be reached at Shyam MalhotrA

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