Game-Playing Eclipses Social Networks, Online Video

**Silverfoot** · 23rd August 2007, 09:34 AM

Quote:

By K.C. Jones
InformationWeek Fri Aug 17, 4:10 PM ET

Social networks like MySpace and viewing short video clips on YouTube may be extremely popular, but online games eclipse both as America's favorite Internet activity, according to a new report.

The research and analysis company Parks Associates announced Friday that games are still the most popular Internet activity in the United States. The report, "Casual Gaming Market Update", found that 34% of U.S. adult Internet users play online games each week, compared with 29% who watch short online videos and 19% who visit social networking sites.

So, gaming is up from 19% in the second quarter last year. Thirteen percent of Internet-connected households reported viewing video clips and visiting social networking sites in the second quarter of last year.

"Despite the growing popularity of YouTube, MySpace, and Facebook, gaming remains the king of online entertainment, driven largely by casual gaming activities," James Kuai, a research analyst at Parks Associates, said in a prepared statement. Kuai said that gaming also has business advantages.

"Unlike sites for social networking and video streaming, which rely solely on advertising revenue, casual gaming has more mature and heterogeneous revenue models, including Web-based and in-game advertising, try-before-you-buy, subscriptions, and micro-transactions," he said.

The report found that year-over-year growth rate for frequent online gamers was 79%, while the growth rate for users of social networking stood at 46%, but users of video streaming sites increased by 123%.

"The casual gaming industry cannot rest on its laurels," Kuai said. "In order to counter the growing competition from other online activities, the industry needs to continue to grow its fan base and find ways to better monetize its existing audience."

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