A new report by industry analyst group DFC Intelligence estimates the worldwide online gaming market will exceed $13 billion by the year 2012.
The majority of this figure will still come from game subscriptions, but DFC also predicts that 40 percent of the market will come from digital distribution and online sales of virtual items. The report indicates that while East Asian countries are currently at the forefront of the online gaming market, Europe and Japan are expected to show strong growth over the next five years.
The increase in market value is being driven primarily by the continuing growth of broadband internet access, higher PC household penetration, and a new focus on connectivity by videogame console manufacturers. Microsoft's Xbox Live is a central part of the company's Xbox 360 strategy, while Sony and Nintendo are both offering similar services for their Playstation 3 and Wii consoles, respectively.
"For PC games, digital distribution is expected to become the leading business model in East Asia," the report says. "However, the videogame console systems are expected to see strong growth in digital distribution and by 2012, revenue from digital distribution on console systems is expected to pass $1 billion."
MMOGs accounted for over half of online gaming revenue in 2006; however, DFC predicts that the fastest growing game genres are likely to be first-person shooters, sports and racing games.