The games market in South Korea will exceed $2bn (£1.08bn) in 2007, according to an industry analyst.
The report by games market analyst Pearl Research said that the figure was boosted by the fast growing online and mobile games markets, as well as the widespread use of personal computers.
"South Korea has a sophisticated IT infrastructure with 79 per cent personal computer penetration and 12 million out of 15 million households connected to broadband," the report said.
"More than 20,000 internet cafes, charging less than $2 an hour, also provide convenient internet and games access."
The PC-based online games market is forecasted to be valued at more than $1.2bn (£0.65bn) in 2006, making it the largest games platform in South Korea.
One of the fastest growing segments is casual games that are free to play, easy to learn and can be played in "micro-slices" of 10 minutes or less.
Pearl Research estimates that casual games account for more than 30 per cent of the online games market, and appeal to a wide audience including females and gamers aged 30 and older.
The San Francisco-based analyst also found that mobile gaming is one of the fastest growing games segments in South Korea and should exceed $275m (£149m) in 2006.
However, Pearl Research warned of challenges ahead for companies wanting to take advantage of the market growth.
"While South Korea has a thriving games market, critical challenges include intense domestic competition, prevalence of 'me-too' or derivative titles, software piracy for console, handheld and packaged PC games, and rising development costs," the report said.
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