I would like to estimate the market size for video games in the USA. Howerver I don't know which approach is better, let me start:
1st Approach:. I would start estimating # Customers x Average spend per customer.
- To estimate the # customers I would estimate USA population x % that buys video games.
- To estimate Average spend per customer I would estimate # video games per customer x Average price per game.
2nd Approach. I would start calculating # videogames sold x Price per game.
- To estimate the # of videogames sold each year I would estimate # of videogames in the market x growth rate. To estimate # of videogames in the market I would estimate # people who buys games x # games per person. To estimate the # of people who buys games I would estimate USA population x % that buys games.
What do you think? I don't know if multiplying it by a growth rate is a good approach. My though process says multiplying it by the grow rate would tell me the # of games people buy each year which is different than the existing games in the market which is the first approach.
Thank you very much.