Online Gaming Worth $13 Billion by 2011

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According to a report released by industry analysis firm DFC Intelligence, the online gaming industry will be worth more than $13 billion dollars by 2011. They cited the growth of broadband connection speeds, the proliferation of PC’s, and the increasing number of gaming consoles connected to the Internet. The growth of online gaming has also led to a greater acceptance of games as an advertising platform, in addition to the established subscription-based model.

The report also states that in spite of overall industry growth, the massively multiplayer online game (MMOG) model will remain the number one money maker. Blizzard Entertainment’s World of Warcraft will generate more than $100 million in each of its markets in a single year. MMOG’s typically reach only a fraction of online gaming’s total audience, generating revenue from either subscriptions or in-game advertising.

The PC’s position as the primary online game delivery system is being gradually supplanted by connected consoles like Microsoft’s Xbox 360 and the upcoming Playstation 3. Microsoft announced its purchase of in-game advertising company Massive on May 4th.

The growth of broadband has also encouraged digital distribution of games, spurring on a burgeoning casual gaming and downloadable content industry through the Internet as well as services like Microsoft’s Xbox Live Arcade and Xbox Live Marketplace. “Digital distribution and virtual item sales have started to do very well in certain Asian markets and these distribution models are expected to start having increased success on an international basis,” said DFC analyst Alexis Madrigal in a statement.

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