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Growth of Digital Gaming Profit Moves Online

It is becoming obvious that in the increasingly expensive world of producing digital gaming consoles and games, both the console vendors and software publishers are looking to the online world to recoup development costs, reports In-Stat.

Paid downloadable content and advertising are becoming key elements in this process, the high-tech market research firm says.

"Sony and Nintendo both launched new online efforts focused on providing paid downloadable content in the form of games from past consoles as well as casual games that will be available for $3 to $15," says Brian O'Rourke, In-Stat analyst. "Meanwhile, Microsoft continued to be the leader in the online console space in 2006, with its announcement of a video and movie download service for the Xbox 360."

In-Stat research found the following:

- From 2005 to 2010, annualized growth of console subscribers will be 40.8 percent, and growth of handheld subscribers will be 94.2 percent.

- Online console revenue will grow at a 46 percent annual rate over the same period.

- Revenue from handheld online gaming may begin to become a factor in 2007.

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