Games outselling music and video in online entertainment markets

Online gaming is leading the digital entertainment market, outselling both the video and music business, according to a new report from Strategy Analytics.

The firm calculates the online gaming market generated USD 3.8 billion in 2006 and it's expected to grow to USD 11.8 billion by 2011, with online sales accounting for one third of all software revenue in the industry.

"The rapid growth of the addressable market for digital distribution of both PC and console games will clear the way for distribution of mainstream hit titles which has up to now been restricted to the physical retail channel," said Martin Olausson, director of digital media research.

The continued uptake of broadband and opportunities in the MMO genre will help attract new business to online gaming, says the report.

"The main driver for sustained growth in the online games market will be the continued uptake of broadband services around the world," added David Mercer, principal analyst at Strategy Analytics.

"Additionally, the very lucrative revenue opportunity in both the massively multiplayer segment and the electronic sell through market will continue to attract new entrants into the online games market."