Streaming now represents a reported 14 percent of Xbox 360 time, 15 percent of PS3 time and 33 percent of Wii time. This growth is fueled by the availability of services like Netflix, Hulu, MLB Network and ESPN3. Time spent on game consoles in general is also on the rise. Metered console usage data from the first half of 2011 shows that the three platforms combined are up 7 percent in user time versus the year prior. Taken together, these findings suggest that streaming is incrementally adding to the time users are spending with consoles.

While the rise of streaming is evident across all three consoles, each maintains distinct usage characteristics. On a share basis, Xbox 360 is most notable for online gaming (34% of usage), PlayStation 3 is most notable for DVD / Blu-Ray viewing (22% of usage) and the Wii is most notable for offline gaming (55% of usage).

More insights on gamers, console dynamics and allocations of time and money within gaming and the broader entertainment category will be featured in the third annual Nielsen 360° Gaming Report: U.S. Market, available in early 2012. Additionally, an overview of key findings from the 2010 version of the report can now be downloaded here.

Survey conducted among a general population sample of n=3,000 in the United States, October 2011.

To help narrow the focus of this analysis, Nielsen filtered the field to those titles releasing on at least one of the three major consoles (Xbox 360, PlayStation 3, Wii) during the timeframe of late August to late November. This year’s list underscores the various interests of gamers—as well as the strength of video game brands. All but one of the Top 20 titles stem from a franchise, with brands such as Madden NFL and The Legend of Zelda dating back more than 20 years. Deep Silver’s Dead Island represents the lone new IP included on this year’s list.

Activision’s Call of Duty: Modern Warfare 3, an expected juggernaut for this holiday season, is desired by more than one quarter (27%) of active gamers. Microsoft’s Gears of War 3 and EA’s Madden NFL 12 follow closely behind; both titles were selected by nearly one out of every five (19%) active gamers. Apart from Gears of War 3 for Xbox 360, other platform exclusives expected to resonate strongly with consumers in the coming months include Nintendo’s The Legend of Zelda: Skyward Sword for Wii and Sony’s Uncharted 3: Drake’s Deception for PS3.

Nielsen’s Top 20 Games to Watch is supplemented by information from NM Incite, a Nielsen McKinsey company, which analyzed the primary elements driving consumers’ online conversations around each title. Recent consumer buzz shows that those anticipating Ubisoft’s Assassin’s Creed: Revelations are excited for the return of multi-player functionality to the franchise, while gamers looking forward to Warner Bros Interactive’s Batman: Arkham City are speculating on the villains they’ll face in the new title. Fans of EA’s FIFA franchise are hoping for more pro and career mode options in the upcoming iteration, and those addicted to Microsoft’s Dance Central are rejoicing in the news that they’ll be able to import tracks from the original title into the sequel.

While Action/Adventure games hold the most spots in the Top 20, the list is a testament to the diverse interests of today’s gamers—from the intense action of First Person Shooters like Square Enix’s Deus Ex: Human Revolution, to the energetic enthusiasm of Music / Rhythm games such as Ubisoft’s Just Dance 3, to the epic sense of adventure in Bethesda’s RPG Elder Scrolls V: Skyrim. Sports and racing titles like 2K’s NBA 2K12 and EA’s Need For Speed: The Run are represented as well.

Amidst many questions about how the next console transition will play out, Nintendo prepares to share details about its new console at E3 2011 next week. According to the opinions of gamers, expressed in both surveys and online chatter, anticipation is high for Nintendo to deliver as it has so successfully with the Wii since that initial reveal six years ago.

To put some context around Nintendo’s plans to launch a new console, Nielsen surveyed gamers about their expectations for and interest in buying a variety of assumed or rumored new gaming platforms to be released in the near future. Almost half of gamers (47%) expect Nintendo to release its new console (known as Wii 2, Wii’s successor or Project Café) within the next two years, surpassing the many other assumed or possible options. This likely reflects rumors of its pending announcement and alleged features such as HD display and controllers that include an embedded touch screen. It may also speak to some latent demand for Nintendo to delight gamers once again. Far less has been said publicly about new consoles from Microsoft and Sony but confidence is reasonably high that they will release these in the near future as well.

Beyond expectations, nearly a quarter of gamers say they would buy a new console from Nintendo (27%) within six months of release, but a near-equal share say the same for new Sony and Microsoft consoles. A second tier of interest contains all of the iOS devices and gaming handhelds (13% – 18%). These figures are driven partly by the current installed bases of precursor devices and the profile of the gamer for each. As a result, Nintendo’s comparatively larger Wii audience is behind much of the interest in the new Nintendo platform. The sheer size and diversity of this audience speaks to the opportunity and challenge for Nintendo in converting Wii gamers to a new platform.

To illustrate this potential challenge more fully, interest in the new Nintendo console among more hardcore, multi-platform Wii gamers is instructive. These are gamers who have experience on both the Wii and an alternative console (Xbox 360 or PS3). These groups voice greater interest in a new Microsoft or Sony console than in one from Nintendo, which could be explained by a number of factors including comparative use or satisfaction with the precursor consoles, time since purchase of precursor consoles, prioritization of a “primary” console based on the precursors, and value considerations. Uptake among these audiences will ultimately depend on the actual features, price point, and timing of release for the Nintendo console, versus satisfaction with currently owned platforms and other new system options.

In a positive sign given what is at stake for Nintendo, online discussion points to heightened anticipation for Nintendo’s console versus the major hardware unveils of E3 2010 at the same time last year. Overall buzz about E3 is up dramatically year-over-year (59% increase), with the new Nintendo console accounting for 22 percent of total messages this year, compared to 4 percent in 2010 for Microsoft’s hands-free gaming add-on Kinect, which was unveiled at the show last year. Much of the increase in overall chatter is coming from Twitter this year versus last (29% of Pre-E3 buzz in 2011 vs. 8% in 2010).

Trended buzz shows a substantial increase in interest generated by rumors and confirmation of the new Nintendo console seven to five weeks pre-E3. This is especially so compared to 2010 buzz for Kinect and Nintendo’s own 3DS handheld, which was unveiled last year at E3 as well. In the past several weeks the differences in chatter have narrowed, though it remains to be seen if any more key buzz-driving information will be released before the much-anticipated unveiling.

On the whole, half of the latest breed of gaming consoles (known to the industry as 7th Generation Consoles) are located in the living / family room. The system most likely to be found in this family-friendly space is the Wii (59%), a reflection of the Nintendo console’s motion-controlled, social gaming style. Comparatively, the Xbox 360 and PlayStation 3 platforms are less likely to reside in the living room, though as more consumers purchase the Kinect for Xbox 360 and PlayStation Move motion peripherals, look for this to potentially change moving forward.

Beyond the living / family room, the next most popular location for consoles is decidedly more solitary: the bedroom, with one in five systems residing in kids’ bedrooms specifically. Here, the Xbox 360 clearly leads the way, with 28% of the Microsoft system’s units located in kids’ rooms, nearly double the rate for Wii (14%) or PS3 (16%). The master bedroom is home to another 10% of 7th Gen systems, with a number of other household locations accounting for the balance of platforms.

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Download a recording of the recent webinar, U.S. Gaming: A 360° View, covering this and other highlights from the second annual Nielsen 360° Gaming Report: U.S. Market. Contact us for the full report, which includes more insights on gamers, console dynamics, and gaming in the context of the broader entertainment category.

Fully 87 percent of users age 13+ say they have played video games of some kind for Xbox 360 and Wii, with 80 percent saying they have done so for PlayStation 3. Much of this is the result of traditional offline play, but nearly half of Xbox 360 and PlayStation 3 users say they play games online. With this in mind, what share of time do both offline and online gaming account for across these consoles? On average, Xbox 360 users claim to spend 62 percent of their time with the system on gaming, with online play accounting for nearly the same share as offline. Comparatively, PlayStation 3 users spend just under half of their usage time gaming, and engage relatively more in offline vs. online play than Xbox 360 users. This difference between the relative proportion of online play for Microsoft and Sony’s consoles likely reflects a number of intertwined factors, such as timing of console launch, profile of players and console exclusives. Overall, what sets Xbox 360 apart from the other two consoles is the total share of time devoted to online play.

The second-most popular use of consoles is for watching DVDs/Blu-Rays, most noticeably for PlayStation 3 but also for Xbox 360 (DVD playback is not a standard feature on the Wii). Sony has made a point of emphasizing the Blu-Ray functionality in marketing for the PlayStation 3 since its launch in 2006, given the company’s broader interest in seeing that technology succeed. In terms of share of time, PlayStation 3 users indicate that DVD/Blu-Ray viewing occupies 27% of their time with the console, which is on-par with offline gaming and, in fact, surpasses online gaming. However, by comparison, DVD viewing occupies only 11% of time on an Xbox 360 (Blu-Ray format is not supported by Xbox 360). In sum, the PlayStation 3 stands out for its use as a DVD/Blu-Ray player as well as a gaming console.

After gaming and DVD/Blu-Ray viewing, roughly a quarter of users say they have used a variety of applications. The most notable in terms of contribution to console usage time is video-on-demand and streaming services such as Netflix, MLB Network and ESPN3, accounting for 20 percent of Wii users’ time, 10 percent of Xbox 360 users’ time and 9 percent of PlayStation 3 users’ time. What explains the Wii’s edge here and usage profile in general? Compared to the other two consoles, the bulk of time on the Wii is in the form of offline gaming; the system trails in use for online play. This may reflect the lesser emphasis on online applications and gameplay for the Wii in general. In terms of streaming, Netflix was introduced this year for the Wii, but its lead in share is likely a function of the fewer hours per user that is being divided up, as detailed below. Overall, the Wii is most defined by its use for traditional offline gaming.

All of the analysis of console time up to this point has looked at consumer-reported share of time rather than electronically measured hours. Though a different data source, metered console usage data can help us understand how big the pie is that is being sliced for each console. Indeed, the total amount of time in hours differs markedly by console. Users 13+ spend 4.9 total hours per week on the Xbox 360, 4.1 hours on the PlayStation 3 and 1.4 hours on the Wii. Males drive these averages for all three consoles, surpassing females in time spent. These differences in time, coupled with the nuances in how that time is allocated, underscore the unique profile of use for each console.

More insights on gamers, console dynamics, and allocations of time and money within gaming and the broader entertainment category will be featured in the second annual Nielsen 360° Gaming Report: U.S. Market, available January 2011.

The video game marketplace continues to be an important in-home entertainment option.  Nielsen reports that over half of all U.S. households (54%) claim to own a video game console or handheld system of some kind. The seventh generation of consoles (Nintendo Wii, Microsoft Xbox 360 and Sony Playstation 3) dominates this tally with a combined penetration rate of 41%.

And despite the stereotypes about teenage males, gamers are not monolithic. In fact, 45% of active gamers are female and women account for half (49%) of all Wii owners and 52% of Sony Playstation Portable (PSP) owners.

On the gameplay front, the average U.S. household played roughly 3.36 hours per week via a console in Q3 2009. Combining TV gaming time with online gameplay, Nielsen reports that average time spent gaming increased 5% year-over-year through the end of May 2009, but since June has largely followed monthly averages from 2008.

Dividing Dollars
Like nearly all industries, the video game market has been negatively affected by the economic downturn. From mobile games to controllers, consumers claim to have spent slightly less than last year across all forms of gaming content. Video game-related spending represents 4% of active gamers’ total entertainment spending, but households with boys 9–12 spend more—allocating 6% to video games and households with teenage males 13–17 contribute 5%.

How gamers divvy up dollars is instructive about distribution and monetization strategies in the industry. Active gamers spend half of their game-play dollars on new games and over one-quarter (27%) on used titles. Game rentals or rental subscriptions account for 14% of spending and downloadable content (extra levels, weapons and characters, for example) represents 5%.

Game publishers need not be overly concerned about spending on the secondary market—at least as far as rentals are concerned. Given the vast number of entertainment hours a game can provide, rentals may serve as a stage in the purchase funnel rather than an end to it, which appears to be in contrast to movies. Fully 61% of game renters claim to buy the game if they like it. The same is true for only 27% of movie renters.

2010 U.S. Outlook

Part 1: Cross Media

• Big Screen, Smart Screen, Small Screen: Top 5 Cross-Media Trends
• You Can Take It With You: Future Trends In Media

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Part 2: Consumer

• Winner Winner Chicken Dinner – Top 5 Consumer Goods Spending Trends
• Innovation Creates Opportunities for CPG Growth
• Aging Puts a Wrinkle in U.S. Marketplace

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Part 3: Advertising

• Talking Back – Top Five Advertising Trends
• Get Ready for the Audience-Centric Web
• What Would John Wanamaker Say Today?

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Part 4: Entertainment

• There’s No Business Like Show Business – Top Five Entertainment Trends
• Game On – The World is Watching More Than Ever
• Video Games in Play

Other notable trends from June 2009 show:

• Video game consoles are not just being played by kids – just under 50% of gameplay came from adults 18+
• Teenagers 12-17 have the largest percent of play, which accounted for 25% of gaming in June
• Xbox 360 and PS2 are now neck and neck in terms of minutes played per month, yet June data shows Xbox 360 is the most active console, with the 6-month trend show Xbox 360 with the highest active users



• PlayStation consoles tend to be more gender neutral than other consoles. Xbox 360 continues to skew more male and Wii continue to skew more female.

• More Americans are playing the newer consoles. Nielsen data shows that current generation consoles, such as Xbox 360, PS3 and Wii, made up 50% of total share of minutes in June 2009, while last generation consoles, such as Xbox, PS2 and Gamecube, made up only 31% of total minutes. Use of older gaming consoles (PS One, Atari 2600, Nintendo 64, Sega Genesis, etc.) made up the 19% balance of usage minutes for the month.

“Primarily, we believe mainstream gamers are playing more of the broadly appealing games (i.e Wii Fit, Guitar Hero and Rock Band) pushing their hours of gameplay up,” said Michael Flamberg, director of client consulting, Nielsen Games. “The social aspects of these games have engaged them. We don’t believe hardcore gamers are driving up the usage averages we’ve observed. Second, gamers may be looking to stretch their entertainment dollar further through playing games they own more. The importance of value for them is evident in the findings on used game purchase.”

In terms of why new game sales have been soft, Nielsen offers three contributing factors that explain this:

1. Used game purchasing is at all-time highs in 2009, looking back since 2006. Claims about how many used games are being purchased in absolute terms and as a share of the total (used vs. new) have increased substantially (see graph). This is corroborated by GameStop’s record-breaking first quarter financial results, on the strength of used game sales. Best Buy recently announced it was getting into the used game market as well and Wal-Mart is testing this out.
2. There has been an uptick in claimed subscriptions to video game rental services by mail, to all-time highs since 2006 (14% of gamers in May). This is a plausible substitute for new game purchasing.
3. New game sales have been soft compared to last year in part because of unfavorable title comparisons in terms of how popular the releases have been this spring vs. last spring. This is a hit driven business and there haven’t been as many hits. Awareness of new titles, when prompted with their names, has dipped in 2009 to lows not seen since 2007.

For more, download The Value Gamer: Play and Purchase Behavior in a Recession and read the coverage in the Los Angeles Times.

A gamer is defined as claiming to have purchased a title in the past 6 months and played for at least 1 hour per week on any of the current consoles or the PC.

E3, Microsoft, Nintendo and Sony Buzz, May 24 – June 6, 2009

Microsoft kicked-off the excitement with a pre-expo press conference on Monday, announcing the new Project Natal, a hands-free motion sensing device for Xbox 360, and the upcoming The Beatles: Rock Band game. Even with an on-stage appearance by Paul McCartney and Ringo Starr to endorse the new Rock Band title, Project Natal overshadowed all other announcements, generating 12% of E3 discussion.

Not to be outdone, Nintendo and Sony each held press conferences on the first official day of E3, revealing major upcoming products of their own. Nintendo unveiled a new Vitality Sensor for Wii, but consumers more heavily discuss two upcoming games for the ever-popular Mario franchise, New Super Mario Bros. Wii and Mario Galaxy 2. In fact, New Super Mario Bros. Wii beats out other highly anticipated titles like God of War III for PS3 and Metal Gear Solid for Xbox 360 in buzz volume. Consumers also heavily discuss the PSP Go!, the new handheld gaming device officially unveiled by Sony on Tuesday. The new device makes up 11% of all E3 buzz, coming a close second behind the heavily discussed Project Natal in hardware-related discussion.

“All three of the consoles have their fans, and sales of consoles and games have been some of the few bright spots in an otherwise bleak retail environment,” said Bradley Raczka, Marketing Manager for Nielsen Games.  “It will be interesting to watch the continued migration to the current generation consoles in 2009, and see how releases of titles such as Halo Wars, Resident Evil 5, MadWorld, Killzone 2 and Street Fighter IV impact usage trends in the first half of the year.”

• Wii: The best-selling of the three systems, appeals to boys age 6-11 and women age 25-34. Usage of Wii by women 35+ is much higher than with the Xbox 360 and PS3. Games such as Wii Fit, Guitar Hero and Rock Band appear to have engaged an older female gamer like never before.

Usage of Wii by the 18-24 age group, considered the core/hardcore gaming segment, is low for both genders compared to the other two consoles.  However, Wii has been successful in broadening the gaming market to a wider demographic audience.

• Xbox 360: For males, the largest percentage of usage is in the 12-17 age group, older than Wii, but younger than PS3. For females, the 25-34 age group had the highest percentage of usage. These consumers may also be attracted to the other services featured such as Xbox Live, which offers online play, onlineaudio/videochat, and the ability to download movies (now with Netflix as part of the NXEXbox Live update),classic video & user generated games, additional game contentand music videos.

• PS3: The Sony console skews the oldest of the three consoles, and that could be the result of consumer brand loyalty, since Sony has been the dominant market player since it introduced the PS One in 1994 and PS 2 in 2000. Gamers who owned one or both of these consoles in their youth may have “graduated” to the PS3 in their assumed adulthood. For both males and females, the highest usage came from the 18-24 age group.

In terms of overall usage, males using the Xbox 360 are playing almost twice as many days per months as females (10.2 vs. 5.4 in December), but on the other two consoles, usage days for males and females are much closer.  On average, the least used console is the Wii.

During the fourth quarter, November had higher than average usage days on all three consoles, due largely to the fact that the bulk of game releases occur during October and November in advance of the holidays.  In 2008, a number of highly anticipated titles were released, such as Gears of War 2,  Wii Fit, Grand Theft Auto IV, Dead Space, Guitar Hero: World Tour, Call of Duty: World at War and  Left 4 Dead .

A complete comparison of console usage during the fourth quarter can be viewed in PDF form here.

Nielsen Games’ GamePlay Metrics service provides measurement of console activity from the National TV Panel of homes.