05:16 PM

Video Games A $40 Billion Market By 2012

Mobile devices are driving growth, but so are increased network access, faster broadband speeds, and next-generation gaming consoles.

The country may be descending into an unknown economic abyss, but many consumers will fiddle away their cares and woes by playing video games, particularly on mobile devices.

A market research survey released this week found that more advanced mobile devices in particular will help fuel robust growth in video games.

Communications market researcher TMNG expects the global gaming industry to reach $40 billion in annual revenues by 2012. Earlier reports have noted that Apple's iPhone with its user-friendly touch screen has been a leading driver of the mobile gaming segment of the gaming business.

TMNG, which examined the impact of video games on both mobile and fixed service providers, attributed the strong growth of gaming not only to features on mobile devices, but also to increased network access, faster broadband speeds, and next-generation gaming consoles.

"Despite the current economic downturn, gaming has proven to be resilient in these trying times and is the leading entertainment segment that is fueling growth," said TMNG chairman and CEO Rich Nespola in a statement. "The expansion of casual games, simpler user interfaces and the proliferation of innovative business models is broadening the gamer demographic. The timing is ripe for service providers to hedge the business cycle."

The survey also found that the user demographic of video gamers is changing -- women gamers make up nearly 50% of the user base of some games and gamers are getting older with 33 now the average age of gamers. Mobile games are expected to make the sharpest impact on the gaming business in the coming years -- TMNG is predicting that mobile games will enjoy a 24.6% compound annual growth rate through 2012.

Service providers are well-positioned to take advantage of the next spurt in mobile video-game growth, the market research firm said, observing that carriers already have scalable network infrastructures, established subscriber bases, and billing systems. In addition, they can easily offer VoIP and IP chat services to players.

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