The console video game market is entering an online era that could take the billion global industry to a new level, and giant software company Microsoft is leading the charge.
Microsoft's Xbox Live online service has already given gamers a taste of the future by letting them compete and chat with far-flung friends, download games and other content, adopt virtual identities and build communities of fellow gamers.
Microsoft's Xbox 360, Sony Corp.'s PlayStation 3 and Nintendo Co. Ltd's Wii promise to give video game makers as much as million to develop a new game.
"An online revolution is happening ... It's an important piece of the economic puzzle going forward," said Gartner research, vice president, Van Baker.
Sony and Nintendo will launch their new online services later this year. Like Xbox Live, those rivals will allow game makers to sell games directly to users already familiar with buying and downloading music and video from the Internet.
Dynamic in-game advertising, made possible by high-speed Internet connections, is also expected to drive revenue by giving marketers a way to reach young male consumers who have moved away from network television and other mainstream media.
EA, the world's biggest video game publisher, is said to be making big investments to prepare for the coming transformation. Frank Gibeau, EA's executive vice president of North American publishing, said that the move is based in part on the thought that online-connected consoles will alter the business.
EA, which is experimenting with download pricing, has said its digital download sales were a relatively small million. But those sales are quickly becoming a meaningful contributor to EA's PC gaming business, said Gibeau.
Sony, which grabbed nearly 70 percent of the console market with the PlayStation 2, says its online service will be a strong competitor to Xbox Live when it launches in November.
"We will be there," said Kaz Hirai, president and chief executive of Sony Entertainment America, who added that the company is forging content deals with a variety of providers.
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