This IDC study forecasts demand for video game and interactive entertainment console hardware and disc-based game software worldwide through 2016. Specific platforms covered in significant depth include Microsoft's Xbox 360, Nintendo's Wii and Wii U, and Sony's PlayStation 3 and PlayStation 2. Demand for next-generation consoles from Microsoft and Sony is also forecast based on a set of reasonable assumptions. Regional breakdowns include North America, Western Europe, Japan, and a combined rest of the world region. Key metrics tracked include console bundle and packaged game disc shipments, console installed bases, hardware and packaged software ASPs, and hardware and packaged software revenue.

"Demand for packaged disc sales will clearly fall as digital distribution ramps up and eighth-generation consoles take center stage," says Lewis Ward, research manager of IDC's Connected Consumer: Gaming service. "This means that console hardware will become a more important aspect of the market from a brick-and-mortar retail perspective in particular. It appears that hardware ASPs will hold up fairly well through 2016, however, so the decline in disc-based revenue doesn't mean that game consoles' value position will be cannibalized by competing platforms anytime soon."