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Console and Handheld Online Gaming

The game console online era started in the second half of 2002 when Sony, Microsoft, and Nintendo all launched online gaming for their consoles. Microsoft�s Xbox Live service is the most ambitious: a closed, broadband-only, pay subscription service entirely run by Microsoft. Sony offers online gaming free to those who buy a dial-up or broadband network adaptor for the PS2, or who have a newer unit with a built-in network adaptor.

Video game consoles and handheld game devices are greatly expanding the market for online gaming, according to a new report from In-Stat. Gamers who play online via their Microsoft Xbox, Nintendo DS or other console numbered 3.4 million in 2004, and are expected to reach 30 million by 2009.

In-Stat predicts Microsoft's Xbox Live online game service will see just under 50 percent annual subscriber growth between 2004 and 2009. For its part, Nintendo has avoided online gaming for its GameCube, but has launched a network of Wi-Fi hotspots worldwide in connection with its free online game service for the Nintendo DS handheld.

Meanwhile, Sony, which currently offers free online play through the PlayStation 2, is expected to have a big impact on subscriber growth and revenues over the next few years with the release of the PlayStation 3; it's unclear whether Sony will continue to offer online gaming for free with the new console, or try to generate revenue with a subscription service.

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