The videogame industry has been growing exponentially in recent years, and a new study from ABI Research has indicated that the growth will continue. According to the study, the videogame market will expand from $32.6 billion in 2005 to $65.9 billion in 2011. Online and mobile gaming will be the primary source of the growth, while the rest of the market will see growth, but to a lesser extent.

The report continues, indicating that the online gaming market will grow at an annual rate of 95% throughout the forecast period. Online console gaming, casual web gaming on the PC and Massively Multiplayer Online gaming will see a bulk of the growth thanks primarily to community services and sales of online gaming-related content.

"The online console gaming market is set to take off, as the new generation of consoles arrives with advanced networking and online gaming capabilities," says Michael Wolf, principal analyst of broadband and multimedia research. "The ability to download game demos, buy casual as well as full-fledged console games, and access advanced content, including HD video, will result in 'online' becoming the key technology component of gaming for this and subsequent console generations."

Online gaming will not be the only source of growth, as mobile gaming will see significant growth throughout the forecast period as well. Increased interest from game publishers and mobile operators will result in ported and original content on the handheld devices.

"Gaming has become a mass-market entertainment industry on a par with TV, movies and music," adds Wolf. "Segments such as video game advertising, set to become a market worth close to $3 billion by 2011, will result in the further maturing of this industry. The ability to play music and media from powerful consoles and handhelds will drive overall industry growth as consumers begin to view gaming devices as one-stop-shop entertainment platforms."

Microsoft has been pushing its Xbox Live service toward casual and hardcore gamers, with its Xbox Live Arcade service tapping into the casual games market as well. In addition, rumors have been circulating regarding a similar online service for the PlayStation 3 when it releases later this year. The Nintendo Revolution will also feature a downloadable library of games from the original Nintendo Entertainment System, Super Nintendo Entertainment System and Nintendo 64.