Features

Network Entertainment Market to Shift from Gaming Consoles Dominance

By Sophia Mayengbam

The market for home networking and linked entertainment devices will grow at an astonishing rate to than USD 85 billion by 2011 from USD 14 billion in 2005, predicts ABI Research. The major driver in overall revenue growth for this market is the transformation of most conventional consumer electronics devices such as game consoles, DVD players, TVs and portable media players from stand-alone devices to network-connected ones, using both wireless and wired IP communications technologies.

"The emergence of enabling technologies such as 802.11n for wireless video distribution, HomePlug AV and MoCA as alternative multimedia network backbones, and DLNA media server and device interoperability software, are all solidifying the foundation for an explosion of new devices and applications based on a fully connected home," said Principal Analyst Michael Wolf.

By 2010 some 30 million households are expected to have "connected entertainment networks," according to a recent study by Parks Associates.

Currently, gaming consoles dominate the market and ABI estimates that in 2006, 44 million consoles and portable gaming handhelds will ship with network connections. However, ABI predicts that other devices such as DVD players, set-top boxes and TVs will begin to rival the gaming market's dominance. The expansion of online distribution of content will play a role in this shift in the world of networked entertainment appliances said ABI.

Today, many millions of handhelds from Nintendo and Sony ship with wireless networking connections, and the new generation of consoles from the big-three vendors all feature options for consumers to connect to online gaming services.

But ABI predicts that the trend in the trend in the market will change with set-top boxes becoming the fastest growing segment, as service providers look to add a multi-room video services to their repertoire of offerings.

Service providers are also beginning to push their hardware partners to integrate Wi-Fi and other connectivity types, allowing the delivery of Internet based content to consumer electronics devices both in and outside the home.

"The inclusion of Wi-Fi in portable devices and set-top boxes creates an ecosystem for delivery of content beyond today's closed systems," said Wolf.

Wolf said that this push by premium video providers will open up new service and content models to compete with the PC as a channel for delivery of video content.

ABI expects that other device group in the segment such as DVD players and recorders and networked home theatres to grow. Initiatives such as Microsoft's Media Extender Partner Program and the new Internet TV consortium with Sony and others, will drive embedded networking connectivity in mainstream consumer electronics devices.

"The fastest growing category for networking silicon providers is entertainment," said Wolf. "Every provider of solutions for high-bandwidth communications technology is busy developing focused solutions tailored to the needs of the consumer electronics vendor. The problems of the past, such as low speeds and lack of standards for software layers, have been resolved, opening the door on an enormous opportunity."


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