December 15, 2005 With two billion plus cell phone users and a billion internet connections, the global networked economy is beginning to emerge globally as an immensely powerful medium. Not surprisingly, some markets are showing more promise than others and networked gaming looks like one of the most likely to succeed. Revenues from U.S. online gaming services will increase from $1.1 billion in 2005 to more than $3.5 billion in 2009, according to "Networked Gaming Driving the Future," a new report from Parks Associates. 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%. Over the next four years, the gaming industry will no longer depend solely on retail sales but will see more balanced and diversified business models.
"The two primary drivers for online gaming are networked services and digital distribution," said Yuanzhe (Michael) Cai, director of broadband and gaming for Parks Associates. "Over the next four years, the gaming industry will no longer depend solely on retail sales but will see more balanced and diversified business models."
The report also concludes that games-on-demand services will complement digital distribution and, in addition, game publishers and service providers could generate significant derivative revenue from in-game advertising and secondary market exchange.
"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," Cai said. "Furthermore, we believe more game publishers and service providers will find ways to monetize the in-game economy, instead of fighting against it."
"Networked Gaming: Driving the Future" discusses consumer adoption of networked gaming, including consumer profiles and interest in connected and cross-platform gaming. It also covers the technology solutions enabling such services and examines the market impact and revenue opportunities for game developers, hardware manufacturers, and broadband service providers.
For additional information on Networked Gaming: Driving the Future, visit Park Associates