Online gaming more popular than web video

Playing games is a more popular online activity in the US than watching short video clips or visiting social networking websites, according to new research.

The Casual Gaming Market Update from Parks Associates found that over two-thirds of US adult surfers play online games on a weekly basis.

This compares with 29 per cent who watch short online videos, and 19 per cent who visit social networking sites with the same frequency.

"Despite the growing popularity of YouTube, MySpace and Facebook, gaming remains the king of online entertainment driven largely by casual gaming activities," said James Kuai, a research analyst at Parks Associates.

"Gaming also has business advantages. Social networking and video streaming sites rely solely on advertising revenue, but casual gaming has more mature and heterogeneous revenue models, including web-based and in-game advertising, try-before-you-buy, subscriptions and micro-transactions."

The year-over-year growth rate for frequent online gamers reached 79 per cent, significantly higher than the 46 per cent growth rate for users of social networking sites.

However, the growth rate for frequent users of video streaming sites was 123 per cent, which could pose a "significant challenge" to the gaming industry in capturing the online leisure time of internet users.

"The casual gaming industry cannot rest on its laurels," Kuai warned. "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 monetise its existing audience."