A new GamesBeat event is around the corner! Learn more about what comes next. 

Sony dominated the game console hardware, software, and service market in 2016, capturing a total of 57 percent share, or $19.7 billion of spending by gamers, according to market researcher IHS Markit.

Sony is expected to continue this run in 2017 with overall sales expected to rise above $20 billion thanks to growth of digital console games.

But IHS noted that the overall console game market shrank in 2016, and Nintendo is newly competitive this year with the launch of the Switch game console on March 3. Microsoft is also expected to rebound from a decline in 2016 with more digital sales and the launch of Project Scorpio (its upcoming PlayStation 4 Pro competitor) by the end of 2017.

The overall console market hit $35 billion in revenues in 2016, counting hardware, software, and services. Sony’s share was almost double that of Microsoft and its Xbox One. The PS4 ended 2016 with an installed base of 53 million consoles sold to date, compared to 27.6 million for the Xbox One.


Three top investment pros open up about what it takes to get your video game funded.

Watch On Demand
Sony's PlayStation 4 dominates the market.

Above: Sony’s PlayStation 4 dominates the market.

Image Credit: IHS

The PS4 was responsible for $17.8 billion of sales value, or 51 percent share of the total console hardware market with Microsoft’s Xbox One at $9.1 billion and a 26 percent share. Nintendo’s 3DS platform (and its variants, such as the 2DS) was a distant third on the list with $2.6 billion of market value or 8 percent share of the market.

The overall console hardware, software, and services market shrank 2.5 percent to $34.7 billion in 2016, but it is expected to grow 4.1 percent to $36.2 billion in 2017. The Switch and growing digital business for all companies is expected to drive the turnaround.

Sony is leading the console war against Microsoft and Nintendo.

Above: Sony is leading the console war against Microsoft and Nintendo.

Image Credit: IHS

The drop was a result of decreased sales volume for console hardware and a reduction in prices for consoles, including Sony’s PS4 and Microsoft’s Xbox One. World console hardware spending in 2016 fell to $10.5 billion from $12.8 billion in 2015.

Games content spending helped mitigate the decline in hardware spending, as both physical media and digital content combined reached sales value of $21.6 billion, up 5.6 percent on 2015. Sales value of platform subscriptions also increased significantly as Sony’s PS4 player base grew, adding fresh subscribers to the market. Consumer spending on console platform subscriptions reached a record $2.8 billion, up 14 percent from 2015.

Sony leads in digital game sales.

Above: Sony leads in digital game sales.

Image Credit: IHS

Nintendo’s consoles held just 5 percent share of the digital games content business on consoles in 2016 at $397 million, down from 7 percent in 2015 due to a lack of new games and paid downloadable content releases. This market share decline will slow in 2017 as digital spending on Nintendo consoles increases once again following the launch of the Switch and start to rebound in 2018 based on current Nintendo Switch sales forecasts.

In contrast, Sony and Microsoft delivered significant gains in digital games content spending across their different consoles. Sony’s digital games content business is now worth $4.4 billion excluding platform subscriptions and is forecast to break the $5 billion mark during 2017.

Both companies are evolving their digital games content monetization strategies, with Microsoft recently announcing its Xbox Games Pass offer and Sony confirming that PS4 titles will be coming to its PlayStation Now streaming service in 2017, driving a share of catalog business into new subscription services.


GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. How will you do that? Membership includes access to:
  • Newsletters, such as DeanBeat
  • The wonderful, educational, and fun speakers at our events
  • Networking opportunities
  • Special members-only interviews, chats, and "open office" events with GamesBeat staff
  • Chatting with community members, GamesBeat staff, and other guests in our Discord
  • And maybe even a fun prize or two
  • Introductions to like-minded parties
Become a member