Home video software revenue up 17%

Growth almost exclusively from gaming sector

Worldwide home entertainment software revenue will grow 17% between 2008 and 2010 to $78.2 billion, fueled by growing consumer demand for next-gen games and Blu-ray discs, according to a new forecast from Media Control GfK Intl.

The report, which covers vidgame and homevid software, predicts worldwide consumer spending of $67.1 billion this year, up 10% from 2007 (including a foreign exchange gain on the dollar of about 2%).

Growth for this year and the next several years will come almost exclusively from the games sector, with game software for all console, PC and handheld platforms expanding to $33.3 billion this year, up 22% from 2007. Games growth will be about 18% in 2009 and 12% in 2010, according to the report.

Homevid, meanwhile, will remain virtually flat at either side of $34 billion worldwide through 2010, with growth from the fledgling Blu-ray format compensating for declines in aging standard DVD.

Blu-ray sales will more than quadruple this year, to $1.5 billion worldwide, according to GfK, then grow 184% in 2009 to $4.1 billion and another 94% to hit $8 billion in 2010.

During the same time frame, DVD sales will fall from $32.2 billion in 2008 to $26.2 billion in 2010.

There are some bright spots globally, with homevideo sales in smaller territories including Italy, Germany, and Australia expected to grow more than 10% this year.

The U.S. accounts for the largest share of the global home entertainment market by far with about 39% this year.

In the U.S., homevideo revenues are expected to decline about 3% this year, with DVD down 8%, to $13.9 billion, and Blu-ray more than quadrupling, to $888 million.

Videogame revs in the U.S. will hit $11.4 billion in 2008, up 19%.

Media Control GfK collects point-of-sale retail data in a dozen countries outside the U.S. Where it does not have point-of-sale data, it used partner data and industry interviews to develop its forecast.

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