A recent study conducted by research firm DFC intelligence called 'The State of Gaming Technology 2000' revealed that the gaming industry will be the key driver in broadband services in the near future. "The game industry is forecasted to become a $20 billion worldwide business in the next two years," said David Cole, president of DFC Intelligence. The company closely looked at the key players in the next console war, including Playstation 2, Nintendo Dolphin, Sega Dreamcast, and even the Microsoft X-Box. DFC believes that the Playstation 2 will emerge as the front runner in the next generation of consoles and stated that the Dolphin and Dreamcast would provide the main competition. Here's the press release...

A new 200 page report from DFC Intelligence, The State of Game Technology 2000, claims that video games and interactive entertainment are of prime strategic importance in the race to provide consumer online and broadband services. Furthermore, the upcoming fight to establish next-generation video game platforms could become the key consumer electronics battle over the next decade. "The game industry is forecasted to become a $20 billion worldwide business in the next two years," said David Cole, president of DFC Intelligence. " However the impact of the interactive entertainment industry is much greater than the revenue it generates. Game hardware systems are likely to become hybrid devices that consumers use for many forms of digital entertainment including music, movies, Web access and interactive television."

The report closely examines the next-generation console systems, including the Sega Dreamcast, the Sony PlayStation 2, the Nintendo Dolphin and the Microsoft X-Box. According to DFC Intelligence, Sony’s system (NYSE: SNE) is forecasted to be the market leader. "The PlayStation 2 is an ambitious system that will have the capability to play DVD movies, access the Internet and act as a complete ‘Entertainment Box,’ what we call an eBox," said Ben Sawyer, one of the principal authors of the report. Nevertheless, the report raises questions about how dominant the PlayStation 2 will be. "The PlayStation 2 may turn out to be nothing more than a great game machine. Whether people use the PS2 to watch movies or access the Internet remains to be seen," said Sawyer. DFC believes that Nintendo (OTC: NTDOY), Sega (OTC: SEGNY) and Microsoft (NASDAQ: MSFT) could provide a strong challenge to the PlayStation 2.

In the long term, DFC believes that video game hardware devices will be a leading provider of multiple forms of digital entertainment products and services. However, it may take five to ten years for this to occur. "Major media companies and online service providers are currently not focused on games," said Cole. "America Online and Time Warner are merging to become a complete interactive services provider. Despite this, the one thing missing from this merger is games." Cole claims that games are likely to become a major reason that consumers subscribe to broadband services. Because of this, large game software publishers, like Electronic Arts (NASDAQ: ERTS), could become key strategic players in the broadband services race.

The State of Game Technology 2000 examines the critical aspects of the interactive entertainment industry, including PC hardware, video game console systems, 3D graphics, sound, development tools, peripherals, portable systems, online games, wireless gaming and location based entertainment.