How Important Is Online Gaming?

All three hardware makers are talking up their online plans but not all analysts are convinced.

All three next generation consoles and both new handhelds will be able to go online - something the gaming community has been pushing for for years. But just how important will these services be to Sony, Microsoft and Nintendo? Two reports out this week went looking for answers.

Of the five online platforms, only one, Xbox 360, uses a subscription model for online play. But as we move further into the next generation, downloadable content is where game companies are going to make their money. This is according to a research report by ABI Research, reported by Next Generation.

ABI says we're in for a major upswing in buying content online, with revenues set to go from around $1 million in 2005 to $3.8 billion in 2011. In-game advertising is also becoming a hot item in the games world and its set to rise significantly over the next few years.

The authors of that report also suggest that gamers will come to expect online gaming to come free with the hardware, an idea that taken to its extreme mean Microsoft could be put under pressure to drop its subscription model.

The second report, from DFC Intelligence via Next Generation, says that while they will play a bigger part during the next generation, "online games are nowhere close to being the tail that wags the dog."

David Cole, author of the report, relegates online play to a selling point for hardware rather than a true focus for hardware makers. Cole says that rather than delivering on its promises of creating an über Xbox Live, as it were, Sony's plans for the PlayStation 3 look more like "the PlayStation 2 with an online store and some inexpensive community features added on".

So where does the truth lie? As with all matter, it's in the future, but it's a future that's fast approaching. Expect all three companies to talk up their online plans at E3 next month.

Alex Wollenschlaeger
Editor, Kikizo Games