US On-line Gaming: US$4 Billion by 2008

Online gaming is growing rapidly. Even miserable old souls like me who can’t stand wizards, Wookies and the thought of being thrashed at Counter Strike by some smug 14 year old whose reflexes are yet to be destroyed by years of gin have signed up for the odd Massively Multilayer Online Roleplaying Game (MMORPG).

A new report from In-Stat/MDR makes some striking claims about the growth of the US market – they estimate it will expand from a measly US$1 billion (€818 million) to a much more lucrative US$4 billion (€3.27 billion) by 2008. Much of this income will come from in-game advertising.

Aside from the growing awareness and acceptability of online gaming, the report states that falling costs will spur growth – when online gaming costs as much as watching television, then it’ll really take off.

The report claims that online gaming costs about US$1 per hour, opposed to US$0.13 for watching TV. I thought the US$1/h figure was a little high, so decided to run my own numbers: a quick calculation shows that my 16 hours of Eve per week sets me back about €0.18 (US$0.21) per hour. I’m not factoring in my broadband connection costs there, because I use that for other things. Honest. Given that many online game players can easily rack up 40 hours a week plus, then cost per hour on a monthly subscription can often fall below €0.07 (US$0.09). But then, they have no friends.

Advertising in games is, as previously reported here, growing alongside the MMORPG field. In-Stat/MDR senior analyst Eric Mantion. States: “The secret strength of online games will be when the volumes of people playing grow to the point where advertisers will start buying ads that will not only be interactive, but also targeted at specific demographics of players.”

In-Stat/MDR hypothesise that half the US population will be playing online games by 2008, which is somewhat optimistic. My own finger in the air guess is about 25%, taking age of population, literacy and competition from less interactive entertainment into account.

Buy Quafe Ultra!

In-Stat/MDR’s report

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Fraser Lovatt

Fraser Lovatt has spent the last fifteen years working in publishing, TV and the Internet in various capacities, and believes that they will be seperate platforms for at least a while yet. His main interests at the moment are exploring where Linux is taking home entertainment and how technology is conferring technical skills on more and more people. Fraser Lovatt was born in the same year that 2001: A Space Odyssey was delighting and confusing people in the cinemas, and developed a lifelong love of technology as soon as he realised that things could be taken apart, sometimes put back together again, but mostly left in bits or made into something the original designer hadn't quite planned upon. At school he was definitely in the ZX Spectrum/Magpie/BMX camp, rather than the BBC Micro/Blue Peter/well-behaved group. This is all deeply ironic as he later went on to spend nine years working at the BBC. After a few years of working as a bookseller in Scotland, ("Back when it was actually a skilled profession" he'll tell anyone still listening), he moved to England for reasons he can't quite explain adequately to himself. After a couple of publishing jobs punctuated by sporadic bursts of travelling and photography came the aforementioned nine years at the BBC where he specialised in internet technologies and video. These days his primary interests are Java, Linux, videogames and pies - and if they're not candidates for convergence, then what is?