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August 08, 2012
Worldwide consumer spending on video games on connected TVs is forecast to grow rapidly to $1.6 billion in 2016, from $88 million in 2012, driven by a combination of exploding adoption of Internet-enabled TV devices, dismantling of market hurdles across hardware capability, user interface and middleware fragmentation and rising availability of free-to-access games.
The market for video games on TV traditionally has been dominated by dedicated consoles. Other distribution channels serving interactive TV games have failed to find any significant competitive traction. However, this state of affairs is changing.
On the hardware front, the latest connected TV devices are now much more capable games machines compared to legacy pay TV STBs. Like smartphones and tablets, which are making significant advances in chipset power, graphics capability and storage, connected TV devices are following suit with similar components.
Furthermore, remote control technology has advanced significantly in recent months and years, with consumer electronics manufacturers deploying more flexible solutions to cater to the cross-section of content that is available through their connected devices. These solutions include built in gesture control and remote apps on smartphones and tablets to enable touch-screen inputs.
One major hindrance to the scalability of the legacy interactive TV games market was pay TV STB middleware fragmentation. However, the industry is starting to offer solutions to this fragmentation issue. These include smart TV platform collaboration between consumer electronics manufacturers LG, Sharp and Philips, device support for platform-agnostic deployment and run-time environments such as Adobe's AIR and third-party publishing networks that help content owners get their games to market through companies such as PlayJam.
Lastly there is the important issue of user monetization and roll-out of effective billing and payment relationships and mechanisms. Progress is being made in this area, but more needs to be done to deliver comprehensive solutions for what is a global opportunity.
Highlights:
- IHS Screen Digest forecasts the worldwide market for games on connected TV devices to reach $1.6 billion by 2016.
- By this point there will be over 1 billion active connected TV devices in the market worldwide, a majority of which will be exposed to games content.
- Platform fragmentation is predicted to increase in the medium term; companies that provide deployment solutions to this fragmentation are well positioned to cement their role in the market.
- Speed to market for operators seeking to exploit this opportunity is key; there are a number of major competitors sitting on the sidelines that we expect to enter - getting established early will strengthen positioning.
- Remote interface, platform standardisation, device capability, discoverability and billing and payment market development hurdles are slowly being overcome. Companies that develop solutions to tackle these issues will benefit in the medium term.
In this report:
- The competitive landscape
- Mapping the landscape for OTT games content and services to the TV
- Games on the primary screen
- Devices in Play
- Platforms within platforms
- Content and revenue value chains
- CE vendors and pay TV operators: competitors or partners?
- The emerging content delivery landscape for games on TV
- Connected TVs as part of a multi-screen or device ecosystem offering
- The key players
- Market size and forecast
- Addressable market
- Hybrid pay TV platforms
- Device overlap in the home
- CE manufacturer market share
- Market forecasts
- Platform outlook: IETVs expected to dominate
- Regional performance
- Business model outlook: microtransactions are key
- Key market development bottlenecks
- Bottleneck One: The Silicon Roadmap For Connected TV Devices
- Other factors influencing SoC developments
- Supply chain status and evolution for connected TV devices
- Chipsets are increasingly well placed to deliver games content
- Storage still lags behind
- Bottleneck Two: Remote Controls On CE Devices
- Increased connectivity
- Pricing
- The current state of play
- Beyond the traditional remote
- Secondary screens
- Looking to the future
- Bottleneck Three: Connected Devices Software
- Development standards
- Development Environment
- Browsers
- Games porting
- Gaming
- Bottleneck Four: Payment & Billing On Connected TV Devices
- The current landscape for billing on connected TV devices
- Games content billing on other connected platforms
- External competition
- Specialist game services
Tables and charts included:
- Games spend on connected TV devices and platforms to 2016 ($m)
- The battleground for TV based OTT services: Devices serving and controlling the primary screen
- Connected TV games store content and revenue value chains
- OEM versus operator platform strengths and weaknesses
- Expected games content and delivery mechanism evolution on connected TV platforms
- Company types and major players in the current content value chain
- Comparison of OEM and third-party games distribution platforms
- PlayJam's positioning
- World connectable TV devices (m units)
- World connected TV devices (m units)
- 2011 world connected TV device/platform share
- 2016 world connected TV device/platform share
- World connected TV devices exposed to games content
- 2011 CE manufacturer IETV shipment share
- 2011 games spend on connected TV, device type share
- 2016 games spend on connected TV, device type share
- 2012 games spend on connected TV, regional share
- 2016 games spend on connected TV, regional share
- Share of spend by business model (per cent)
- Convergence trend for TV, STB and Application processor
- Functional Integration path, TV/STB/TCON/Apps
- TV/OTT STB SoC roadmap 2009-2016
- Example TV, OTT Chipset specs
- Total remote controls, by device type (m)
- Functionality of current remote control types
- Remote Control: Price of technologies
- Remote control mechanisms
- Roku 2 and Apple TV remotes
- Remote control applications
- Standards for developing a website
- HbbTV and CE-HTML components
- Platform support for development environments
- Browser manufacturer relationships
- Selection of key partnerships in payment and billing
- Payment and billing value chain
- Positioning of user ecosystems with billing relationships
- Major non-specialist user ecosystems (m)
- Major specialist user ecosystems (m)
Pages: 46
Tables & charts: 38
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