Market Insight

Games console owners globally more likely to subscribe to OTT video and pay TV services

October 03, 2018

Daniel Stevenson Sutton Daniel Stevenson Sutton Senior Research Analyst, Service Providers & Platforms

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Highlights

  • There were 49 million games consoles shipped worldwide in 2017, with North America receiving the largest share (18.4 million units). At the end of 2017, the global number of connected consoles reached 164 million, of which 83 percent were seventh- or eighth-generation gaming consoles from Sony and Microsoft.
  • The latest finding from the IHS Markit “Connected Devices and Media Consumption” service revealed that 35.6 percent of households owned a games console. The survey examined device ownership, use and access of subscription and free video services and decision drivers.
  • Among games console owners, 89.6 percent said that their household had access to at least one over-the-top (OTT) video subscription service, compared with 51 percent of all consumers surveyed.
  • Among households with games consoles, 88.6 percent had one or more pay TV services, compared to 57 percent of all survey respondents.

Our analysis

While gaming remains the core function, Microsoft and Sony have leveraged their existing online stores to provide digital rental and retail options in their seventh- and eighth-generation consoles. Opening their platforms to third-party applications has also allowed major and niche online video services to access television-centered devices, which make viewing on the main screen convenient and enable media content streaming functionality similar to what’s offered by dedicated media streaming devices, like Apple TV and Amazon FireStick.

The high penetration of subscription video services among game console owners reported in the IHS Markit survey, particularly pay TV services, is hardly surprising. Games consoles remain premium devices with prices ranging between $200 and $400, meaning these households have already shown a propensity toward media spending.

Console ownership and video service subscription also varies by country, as follows:

  • In the US, the largest market in terms of games console sales and connected consoles, more than one-third (38.2 percent) of respondents indicated they had access to one or more games consoles. Nearly all (97.8 percent) of console-owning households subscribed to at least one pay TV or subscription video service.
  • The majority of Brazil’s console-owning population subscribes to multiple video services, including traditional pay TV and online video subscription services. Eight out of ten console owners in Brazil had a household subscription to Netflix, which is 13 percent higher than the national average. Five percent of console owners who subscribed to Netflix said that their console was their preferred way to access the service.
  • In Germany, there were 7.6 million connected games consoles at the end of 2017. The PlayStation 4 was the most common device, with five million connected consoles. Nearly one-quarter (24 percent) of PlayStation 4 households in Germany also owned a PlayStation 3, and 14 percent owned an Xbox One.
  • Just 22 percent of Japanese console owners subscribed to online video service Netflix, while a comparably low 14 percent subscribed to Free Retransmission Cable, the largest pay TV operator in terms of subscribers. Nearly one-third (31 percent) of PlayStation 4 owners in Japan indicated that access to content – either for themselves or other household members – was their primary driver when purchasing the device.
  • Two out of five UK survey respondents indicated that their household owned one or more games consoles. As was uniformly the case across the all markets surveyed, the PlayStation 4 was the most popular console. Netflix is the largest online video operator in the UK with 31 percent of respondents saying they had access to Netflix, rising to 48 percent when looking specifically at console owners.

IHS Markit brings together operator intelligence with consumer behavior analysis, to highlight the dynamics and addressable market of connected consumers and devices. This service comprises biannual consumer surveys to understand the interplay and overlap between device ownership and media consumption with demographic breakdowns. The above data is based on a nationally representative sample of 12,005 internet users across the US, UK, Germany, Japan and Brazil, conducted in April 2018.

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