Contents
Growth in Video Game Households
Demographics of Households with a Video Game System
U.S. Trends Account for Some of the Demographic Shifts
Game Boy Household Demographics Differ
Conclusion
 

This memo is in response to a recent request for historical demographic data. Our process involved retrieving and restoring archived data files (this part was not fun), and then analyzing various outputs. The information presented below is from Alexander & Associates’ annual Video Game Benchmark reports and recent Video Game Snapshot tracking.

To summarize the key findings from our investigation, here are some quick bullet points:

• The number of U.S. households with a video game console has risen by 13% since 1995 – from 31.4 million to 35.5 million (33% penetration in 1995 to 34% in 2001; total U.S. household population has increased by 8% from 96.6 million in 1995 to 104.3 million in 2001).
• As the number of gaming households has been growing over the past five years, the demographics of households with a video game console have also expanded. Video game homes have penetrated urban areas and become more popular amongst minorities and homes without children. Video game homes are also wealthier and have fewer people in the household – suggesting a growing adult market for this entertainment medium.

Growth in Video Game Households
In late 1995, Alexander & Associates was conducting research for our annual Computer/Video Game Benchmark Study. A survey of 2,000 U.S. households showed a penetration of 32.5%, or 31.4 million homes, that owned a video game system (defined as a “system that connects to your TV and plays games that come in cartridges or on CDs”). Approximately 11.7 million homes owned a Super Nintendo, 12.9 million owned a Sega Genesis, and 22.3 million U.S. households had a video game console that had either a 16-bit or 32-bit processor (i.e., SNES, Genesis, Atari Jaguar, Sega Saturn or Sony Playstation). Sony Playstation was released in 1995, and had not yet gained a significant penetration level by the time of this study (under 1 million units). Nintendo officially dropped the Nintendo Entertainment System from their product line in 1995, but there were approximately 12 million homes that listed that device as either their primary or secondary console.

In may 2001, through our monthly Video Game Snapshot tracking service, we surveyed 2,000 U.S. households to find a penetration of 33%, or 35.5 million homes that own a video game console (note that the number of U.S. households grew from 96.6 million in 1995 to 104.2 million in 2001). By including Game Boy hand-held devices, this figure rises to 36% or 37.8 million US households that own a video game system with cartridges or other removable software media.

Demographics of Households with a Video Game System
The root of your recent inquiry seems to be the following question: “Understanding that the number of households with a video game system has grown, have the demographics of these households expanded as well?” For many reasons the answer to that question is a resounding "Yes."

What it means to be a “Nintendo household” has certainly changed since 1995. When comparing the demographics of Super Nintendo homes to that of Nintendo 64 homes, the most significant shifts appear to be in the racial profile and the presence of children in the home. In 1995, nearly 73% of all SNES homes were white, while in 2001 only 66% of N64 homes are white. Nintendo has been more successful at appealing to both African American and Hispanic homes.

Seventy-eight percent of SNES households had children in 1995, whereas only 71% of N64 homes have children in 2001. On a unit basis, 9 million SNES homes had children in 1995 and 10 million N64 homes have children in 2001. This means that the distribution of N64 penetrates more homes without children than its predecessor console. While N64 homes are more likely to have a teenager than SNES homes, N64 homes are far less likely to have a child under the age of 6 and slightly less likely to have a child between the ages of 6 and 11.

In comparing N64 homes to SNES homes we also observed that a higher percentage of N64 homes are located within metropolitan, non-rural zip codes and that the average income of a N64 home is over 30% higher than that of the SNES home.

Back in December of 1995, the most popular consoles in the market were Sega’s Genesis and the Super Nintendo (SNES) – both 16-bit video game consoles. Genesis was released in 1989 and SNES was released in 1991. In 2001 the most popular currently installed devices are Sony’s Playstation and the Nintendo 64. As of May, the installed base for Nintendo 64 is 14 million – N64 having been released in September of 1996. Sony’s 32-bit Playstation device can be found in approximately 17.3 million US homes. For this reason, we decided to compare the mature 16-bit market of late 1995 to the mature market of mid-year 2001 where the original Playstation and Nintendo 64 are well-established and Dreamcast and PlayStation2 each have penetrations of at least 3.5 million homes.

Similar to the shifts in Nintendo household demographics from 1995 to 2001, there are noticeable differences between the demographics of the broader base of homes with any* console during that same period.

As with the shift in Nintendo households, in general, video game households in 2001 are more racially diverse, have higher incomes and are less rural. The percentage of gaming households that have children under the age of 12 is far lower in 2001 than it was in 1995. This does not imply a unit decline in homes with children, only a shift in the ratio.

In 2001 fewer households with a console have children. This contributes to a smaller household size – the average size of a gaming home drop from 3.9 to 3.6. In addition, an increased percentage of households with a console are divorced. (Return to Contents)
 

U.S. Trends Account for Some of the Demographic Shifts
Since 1995, overall U.S. household demographics have shifted in line with a few trends, including: re-urbanization, increases in divorced households, an increase in household income, and a rise in minority populations. (Return to Contents)
 

Game Boy Household Demographics Differ
Households that own a Game Boy or Game Boy Color differ, in some aspects, from the demographic composition of console homes. Game Boy homes are less ethnic and less likely to be located in urban areas. With an increased likelihood of having children (74.4%), and a higher percentage of marriage (60.6%), the average size of a Game Boy household is larger than that of the console household.

Game Boy homes are more likely to have children than console homes – 54% of all Game Boy homes have children between the ages of 6 and 11 (Pokemon’s target audience).

Game Boy households in 2001 resemble the console home of 1995. It is not surprising to find that the 8-bit Game Boy has a stable appeal towards the younger audiences, while the console market at large finds more stability in older audiences. (Return to Contents)
 

Conclusion
In the past five years gaming has become a stronger component of the U.S. household media consumption pie, as the console video game industry has expanded in both size and demographic appeal. We believe that this memo demonstrates two important messages. First, it is crucial to clearly define what it means to be a “gamer”, and to obtain a high sample size of that group. Equally as important, obtain access to current information since the marketplace is dynamic. (Return to Contents)

For more information, email aainfo@alexassoc.com or phone 212.684.2333.