Market research firm Parks Associates has released a new report called "Connected Consoles: Games, Media and Beyond," which examines the revenue streams from digital video distribution, downloadable games and content, virtual worlds and avatar-based microtransactions, multiplayer gaming services, and dynamic in-game advertising. Ultimately, Parks believes that the "big three" console makers – Microsoft, Sony and Nintendo – will greatly benefit from the online boom and increasing penetration of broadband Internet.

By 2013, Parks forecasts that online content and services for Internet-connected game consoles will generate over $8 billion in global revenue for Microsoft, Sony, and Nintendo. "Broadband connectivity, now a common feature for game consoles, is a key enabler for new business models," said Yuanzhe Michael Cai, Director of Broadband and Gaming, Parks Associates. "Among the different online revenue opportunities, digital video distribution and downloadable games and content are the most promising."

Microsoft has been dominating the online scene with its Xbox Live service, but Parks notes that "Sony and Nintendo are gaining ground as they ramp up their base of connected customers and diversify monetization methods." Sony recently launched its movie and TV downloads service on the PlayStation Network, and the company has been offering far larger games to download over PSN than file size limits will allow on Xbox Live. Meanwhile, Nintendo has been ramping up its online offerings with WiiWare, which complements the company's library of catalogue titles on Virtual Console.

"Led by Microsoft's success in Xbox Live, all three console makers are dreaming up many innovative offerings to entice console households to get connected and spend more money," concluded Cai.

From the article, "Microsoft, Sony and Nintendo to Generate $8 Billion in Online Revenues by 2013, says Parks Associates" by James Brightman

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