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Just for kicks, let's try to size the video game market.

In September, Forrester reported that about 50% of adults are "gamers". Pew Reports gave roughly the same number back in December 08. So, therefore, we can assert that they're both absolutely right because they match. (Note to my Stat profs: Yes, I know that you can’t conclude they’re correct just because they match. So get out of my head.)

How much do people spend on video games? Well, NPD says that it’s about $20B in the USA. (I’ll observe that I’ve seen analysts such as Forrester reference NPD reports, so we can assume it’s a credible estimate.) (Sigh. My stat profs are complaining again.) Since we know (US Census) that there are about 113M households, this means each household spent an average of $176 last year on video gaming.

A Nielsen report says that only 24% of US households spent money on videogaming last year - that's 27M households(24% of 113M is 27M). If true, those 27M households spent an average of $740($20B/27M). That feels high. Cross-checking a another report by Forrester claims that the average spending of a video gamer, is only $113. So, either there are about 7 video gamers in each of the 24M households (7 x $113 is $791 per household), this other Forrester report of $113 spent per gamer is low, or there are more than 24% of households that spend money on games.

Yet another Nielsen report says that 83% of US teens have a video console in their home. If this is true, yet only 24% of all households spend money on videogames each year, 59% of teenagers are angry that they’re not spending money on new videogames for their consoles. Knowing the power of teenager demands, I can’t believe that as many as 59% of households suffer from video game envy. I’m guessing that the 24% estimate may be one to examine – that there are more households spending money on videogames than Nielsen suggests.

Why do I care? First of all, I just enjoy playing with statistics. (There ... that should silence those stat professors in my head.)

But, more importantly, all applications software markets are inherently cross-leveraged. A person spending money in one area makes a decision in relation to spending money in another category. Consider a decision maker in a household who feels compelled to spend $120 per year on video games. They do that in relation to the $1200/year they’re spending on communications & internet. They’ve established an inherent value. “Keeping my teen happy is worth 10% of my communications budget.” And that value perception is retained even after they walk out front door. More importantly, a person’s exposure to a user experience such as gaming impacts their usability expectations. Here’s a hypothesis: Since a huge number of people have had fun with these new powerful video game consoles, whey come into an office and start working on the computer, they’ll find the user experience less interesting. So, yeah. We care. We care a lot.

Kevin Kennedy's Keynote at the recent Interop showed a short vignette of how Avaya Research is thinking about user experiences. Click here to see our CEO's Keynote at the recent interop
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