The PC Gaming Alliance (PCGA), a nonprofit corporation dedicated to driving the worldwide growth of PC gaming, today unveiled its third annual Horizons research report. This preliminary report, prepared for the PCGA by market research firm DFC Intelligence, covers the 2010 year end and encompasses all major aspects of the PC gaming industry worldwide through 2014. The full in-depth report will be shared with all PCGA members the week following GDC.

Among the key findings: the global PC games market continues to show surprisingly strong growth in 2010, reaching a record $16.2 billion. This represented overall growth of 20% over 2009. No geographical market segments tracked showed a decline in 2010 in overall PC game revenue.

China continues to be the largest and fastest growing market for PC games with record 2010 revenue of $4.8 billion. However, mature game markets in Korea, Japan, U.S., U.K. and Germany all showed growth in 2010. Together these markets increased revenue 19% in 2010 to $7.3 billion.

Asian companies that have generated substantial profits in their domestic territory are looking to expand to the rest of the world. Some prominent worldwide investment examples cited include Disney/Playdom, Warner/Turbine, Tencent/Riot, Shanda, Zynga, Visa/Playspan.

The growth of digital distribution is also increasing the revenue potential for blockbuster big budget retail games. Large games can now be downloaded directly from the publisher or a third party site like Steam. Thus, brick and mortar retailers have simply become an optional source for distribution. Meanwhile, most PC games are doing well with a pure digital distribution strategy that relies on multiple payment methods including digital point cards at retail.

“The spotlight has definitely shifted back to the PC game market. A few of the biggest factors fueling this movement are innovative business models making games more accessible with digital distribution, free to play, and online; along with game formats embracing the shifts occurring in the evolution of the PC ecosystem to remain more profitable,” said Matt Ployhar, PCGA president and Intel analyst. “Large game publishers are looking at digital revenue on the PC game platform as one of their key areas of growth and it is clear that the performance of the PC game market in 2010 is resulting in substantial investment money flowing into the PC game business.”

The report concludes that the PC game business will continue to grow at a pace of 9% CAGR to $23 billion by 2014. Most of this growth will be driven by the increasing ease of digital distribution delivery solutions and payment methods. According to DFC analyst David Cole “right now, outside of direct publisher digital distribution, Valve’s Steam service dominates delivery of large client size games. However, this is likely to change as other premium players enter the market for digital distribution.”

Additional information about the PCGA and its role as the voice of the PC gaming industry is available at

The annual D.I.C.E. Summit is the premiere event for the games industry to get together and talk about the current state of the business, and the future. The networking is second to none and the talks are TED-like. for those that didn’t get to attend, the talks are now online through G4. Here are a few of the best talks from the show:

John Stevenson’s “Monsters, Muppets and Movies”

Jade Raymond’s “Creating Blockbuster IP for Generation C”

Dr. Ray Muzyka and Dr. Greg Zeschuk on “The Bioware Method”

Bing Gordon’s ‘Golden Age of Gaming’ Acceptance Speech from Interactive Achievement Awards

Here’s the Full DICE 2011 Video Index:

According to the Interactive Skills Integration Scheme (ISIS), which is funded by Australia’s Department of Education, Employment and Workplace Relations, Australia has:

  • 931 full-time developers
  • 126 studios around the country

This is a major decline from 2008 when the country had more than 2,000 game developers working in the industry. ISIS project director Justin Brow attributed part of the decline to the work for hire market drying up and projects going internal at most of the publishers.

The country had focused on very few original IPs on console platforms, but has had success on iPhone with Firemint and Half Brick leading the pack.

Countries looking to get their fair share of the market need to consider a few things:

1) If you compete on price for work-for-hire projects, it should be a transitional period to build skill sets and experience towards developing original IPs. Most countries have rising labor costs as skills are acquired and experience gained among the workforce. This advantage is lost as the next country competes on price as it builds its workers’ skills.

2) Canada, with its tax incentive programs, is the #1 competitor to all countries with a trained and skilled workforce in the creative media industries. When the price is subsidized and the geographical location is more favorable, it’s impossible to compete. You can’t move geographically, but you can subsidize a worthwhile industry that will bring in tax revenues in excess of the incentives. The long-term training of the indigenous workforce is also a major benefit of these programs.

3) The barrier to creating a game and commercializing it is almost non-existent today. The barriers to getting a wide audience are making a quality game and finding the channels for distribution and awareness building. Marketing tends to be a black art among many developers, but it really needs to be a consideration early in the development process. Governments can support their creative industries by providing training on marketing and distribution, as well as general business administration and economics skills. These are essential for any business and don’t have to be industry specific.

4) A healthy games industry means more skilled knowledge workers which boosts tax revenues and average household income. These reflect positively upon a government when it is creating and supporting higher paid jobs and building a larger tax base. The most successful example of this is of course Canada. Everyone should follow Canada’s lead to some degree.