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The Jon Peddie Research Gaming Market Press Conference

All Gaming Hardware

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The Gaming Hardware Market From handhelds to simulators

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Jon Peddie Research

Focus and emphasis on Visualization, Graphics, and forms of reality

Consulting and market research - Advisor to industry leaders and investors

Bi-weekly report, various Digital Technology Market Studies

Product testing and benchmarking

Conferences

Chasing Pixels, Finding Visual Magic

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Jon Peddie Research “Whatever influences a pixel”

Primary interest,

expertise, and tracking

General interest, information

gathering, and limited tracking

Semiconductor Fabrication

Display

System Memory

CPU

Drivers

Application

Communications & peripheral services

Standards

OS

Video Processor

Graphics Processor

Local Memory

Audio Processor

Receiver(s)

Front-end Processor

DVD

Input Processor

Image sensor

Image Processor

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Agenda – Why are we here?

Introduce talking points for discussion

Brief history of computer graphics

The gaming platforms

Market size and growth

Thoughts and speculations on the future

Q&A

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How long?

When do you think the game developer conference started?

Depending on who you ask, 1997 to 1999.

Actually it was 1993 and was the GamePC Consortium, a loose confederation of hardware and software companies

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Look How Far We Have Come

In 1996 the best the industry could do was an image of

100,000 triangles, 30 times a second, on a 640 x 480 screen ,

Lora Croft from 1996 Lora Croft from 2013

By 2013 it was possible to generate over a 100 million polygons at 60 to 120 times a

second on screens greater than HD

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History of Computer Graphics

3D on mainframes

Wireframe CAD

3D on Min Computer &

Workstations

Wireframe CAD

1950s to 1960s

1970s Developments in Rendering and

Photorealism

(Ray-Tracing, Texture Mapping, Voxels

Simulators and early animation

3D on game consoles

1980s

1990s

Introduction of the

PC

Developments in Conics, Bezier curves,

Surface patches, NURBS, lines, Solid

Modeling, Finite Element Modeling

3D in the movies

Introduction of 3D

games on the PC

VGA to

3DVGA

GPUs

2000s

Photorealism, Physics, AI

2nd gen 3D game

consoles

3rd gen 3D game

consoles

3D on Mobile

Phones &

Tablets

3D on

Handheld

consoles

8th gen 3D game

consoles

The SAGE terminal

It wasn’t a smooth path

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How did we get here?

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From this ~ 1945

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And this

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1945

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Which would be carried by this…

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First Soviet intercontinental bomber – TU85

1949

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Led to this

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First computer graphic terminal for SAGE ~ 1955

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Which created the foundations for this

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2013

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mainframes

Minicomputers

Microcomputers

Mobile Computers

Personal Computers

Evolution of Computer game machines

1940

1960

1970

1980

2000

Computer chess program (1947)NIM (1951)Tic Tac Toe (1952)

SpaceWar (1962)

Game Consoles

Arcade Machines

Handheld Game Consoles

Vacuum Tubes

Transistors

Integrated Circuits

Micro-processors

Fairchild Channel F Casino Poker, Space Odyssey, and Pro-

Football(1976)

Atari - Computer Space (1971)

Relay-based Computers

Zuse Z1 1936

Mattel – Football (1976)

Tetris (1994)

Adventure (1977)

Test Drive (1982)

(3D) Duke Nukem (1996)

VR

VR 2

As soon as you have a technology, someone tries to make a game out of it – Kathleen Maher 2007.

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0.1

1

10

100

1000

10000

100000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

GPU

GFL

OPS

GPU GFLOPS

PC GPU

Console

Mobile

OGL ES 1.0

OGL ES 1.1 OGL ES 2.0

OGL ES 3.0

OGL ES 3.1

PS4

PS4

Xbox

Xbox 360

There is no such thing as catching up Moore’s law serves all platforms Only software holds us back

Are mobile devices catching up to consoles and PCs?

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These are not either-or. Gamers have most, if not all of these machines (except maybe arcade)

PC 33%

Consoles 16%

Android Consoles 0.07%

Smart Phones 23%

Tablets 11%

Handhelds 3%

Location based 6%

Peripherals 8%

2014 Gaming Hardware Market

$67 Billion Gaming Hardware Market 2014

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Enthusiast DT 1%

Performance DT 3%

dGPU DT Mainstream 7% iGPU Mainstream DT

34% High-end NB 5%

dGPU Mainsream NB 8%

iGPU Mainstream NB 42%

PC Units Market Share 2014

$22 Billion, 5% CAGR

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Gaming Software Market $26 Billion

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Mice 25%

Speaker Systems 22%

Keyboards 19%

Wired Headsets 19%

Wireless Headsets 6%

Flight Controllers 2%

Driving Controllers 3%

Gamepad/Arcade Controllers

3%

Head Tracking / Motion tracking

1%

Peripheral PC Gaming Market $6b 1.5% CAGR

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Sony 47%

Nintendo 15%

Microsoft 38%

Console Units Market Share 2014

Traditional TV-based Console Gaming Machines - $11B 3% CAGR

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Sony 33% Nintendo

67%

Handheld Units Market Share 2014

Traditional Handheld Gaming Consoles $2b -2% CAGR

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New Gaming Hardware Devices Powered by Android

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New Handheld Gaming Machines $33 m 50% CAGR

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2013 2014 2015 2016 2017 2018

Market value ($M)

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Android Consoles

We define Android consoles as any device designed to play Android games on TV’s. Shield is really a path maker. The micro-consoles will have their niche, larger opportunity is on large screens using a gamepad to play.

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Android Consoles Amazon Fire TV + Controller Gamepop Gamestick Google Android TV plus controller MadCatz Mojo Ouya Razer ForgeTV Shield Portable Shield Tablet + Controller Shield Console

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Other Handheld Gaming Machines Check your pocket – you have one

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were games (Media Research)

Ave 50% phone users play games (Media Horizons)

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Mobile Games

Consumers are spending so much time—and money—playing games on smartphones and tablets that Newzoo, a video game research firm, has had to raise its 2014 global revenue forecast from $21.7 billion to $25 billion. The new total is a 43% increase over mobile game revenues recorded for 2013.

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Assumptions on Gaming Market Value

The average selling price of a smartphone is $297

1 billion smartphones shipped in 2014

Assume game playing influenced 5% of the purchases

Smartphone gaming market worth $15 billion CAGR 5%

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Assumptions on Gaming Market Value

The average selling price of a tablet is $294

260 million Tablets shipped in 2014

Assume game playing influenced 10% of the purchased

Tablet gaming market worth $7.6 billion CAGR 4%

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Mobile Games According to eMarketer, Mobile Game Revenues to Grow

16.5% in 2015, Surpassing $3 Billion.

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A boom in the Bay area and elsewhere in the late 1970s and early 1980s – and then banned.

“The older generation has no qualms about leaving us with dirty air, dirty water, and 9,000 nuclear warheads, but they worry about whether video games are good for us,” Steve Lisberger (Tron director)

Game Arcades

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Location Based

$4 billion CAGR 2%

Does not include Gaming Cafes

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Twitch

has more than 100 million visitors per month and accounts for a huge amount of Web traffic. In the week ending Feb. 3, for example, Twitch accounted for 1.8 percent of peak U.S. Internet traffic – ranking fourth after Netflix, Google and Apple, and above Hulu, Facebook, and Amazon.

In August, Amazone acquired Twitch for $970 Million- CASH

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Summary - So What?

The gaming hardware market is huge - $67 Billion - more than Syria’s GNP, and 75 other countries

Gaming software market $26 Billion

New platforms will add new players

Games will be cross-platform

Moore’s law serves all platforms

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Jon@jonpeddie.com Ted@jonpeddie.com Kathleen@jonpeddie.com

Chasing pixels – finding Visual Magic

Be seeing you

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Sponsors

Time to raffle off some prizes