Friday, December 16, 2005

Parks Associates: Online Gaming Revenues toTriple by 2009

Parks Associates looks at the U.S. online gaming market and predicts it "will increase from $1.1 billion in 2005 to more than $3.5 billion in 2009." According to their new report, "networked gaming services, including online console gaming, massively multiplayer online gaming (MMOG), multiplayer Internet gaming, and mobile multiplayer gaming, will account for almost 50% of online gaming revenues in 2009, followed by digital downloads at 23%."

Yuanzhe (Michael) Cai at Parks Associates said, "The two primary drivers for online gaming are networked gaming services and digital distribution. Over the next four years, the gaming industry will no longer depend solely on retail sales and instead will see more balanced and diversified business models.”

He added, “The gaming industry is definitely learning valuable lessons from the video industry – syndicated game networks such as GameTap can extend a game’s release window and in-game advertising can lead to innovative business models such as free MMOG. Furthermore, we believe more game publishers and service providers will find ways to monetize the in-game economy, instead of fighting against it."

I'm a big fan of online gaming so I'm interested in seeing where mobile multiplayer gaming is heading. Right now from a cellphone perspective, the slow adoption of high-speed data networks and lack of storage on handsets will hold back the market. In the handheld gaming space, Sony is taking a hands off approach, leaving online gaming efforts in the hands of game developers, while Nintendo seems to be developing a coherent strategy for the DS given its recent initiative to offer free Wi-fi access at McDonald's and other places. Might have to get my hands on th DS afterall...