Console and PC game markets doomed to shrink, analyst firm predicts

So much for the enthusiasm around next-generation game machines.

Console and PC game revenues are expected to decline 11 percent from $46.5 billion in 2014 to $41 billion by 2019, according to a report from analyst firm Juniper Research. That’s a steep decline in the current generation of consoles that just got started in 2012 and 2013.

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Juniper also said that, despite the rise of mobile games, console and PC games will still account for more than 50 percent of revenues for the game business over the next five years. The gloomy message is that mobile game revenues will not rise fast enough to become bigger than traditional games.

But Juniper said that the level of console and PC game sales in the industry will remain relatively healthy. Game companies, however, shouldn’t believe any hype about endless growth. The report notes an uplift in revenues as Xbox One and PS4 launched in November, 2013 but warns that the corresponding current rise in console software sales is going to be a short-term one.

One bright spot: Cloud games will grow from $281 million in revenues in 2014 to more than $1 billion over five years. That includes revenues from web-based game services such as Sony’s PlayStation Now service.

Juniper said it believes the ninth generation of game consoles will arrive around 2019, assuming the console lifecycle doesn’t change too much. On the PC, multiplayer online battle arena games such as League of Legends will be among the most popular genres. Handheld devices will struggle, shrinking to under 2 percent of the total game industry sales by 2018. And online game streaming platforms such as Twitch will continue to grow, Juniper said.