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The computer games software retail market (essentially, now the PC
market) has continued to decline or, at best, remain flat over the last 7 years as a result of growing console sales (the Xboxes in particular), increased online gaming and due to the reduced flow of major PC titles
and the increased prominence of mid-priced PC titles.
For many years, online gaming revenues partly (but only partly) offset this retail market decline and in 2005 and 2006 the overall PC games market including digital downloads and MMOG revenues finally recorded substantial increases.
We believe that the continued growth of the online games market, the growing use of Windows Vista, (and more importantly DirectX 10), Microsoft's Games For Windows and Games For Windows Live initiatives and
the increasing use of new payment and billing mechanisms for online gaming will continued to revitalise the PC gaming market overall. The addressable market is certainly there. Around 230m new PCs shipped worldwide
in 2006 alone and that number is forecast by some analysts to grow by as much as 10%-15% in 2007. We estimate that the UK installed base of games-capable desktop (and laptop) PCs in the home is probably around 4-5
million although growth is largely flat, with approximately 1.5-2.5 million new PCs being added each year and a similar number falling out of the games-capable category due to technical obsolescence.
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