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$20 billion online market by 2012 says analyst

New study highlights smartphone and cloud gaming concerns

The online gaming market in North America, Europe and Asia Pacific will be worth more than $20 billion in 2012, according to the latest predictions from analyst firm ABI Research.

The new study claims that China will be one of the main sources of growth, although there will continue to be a significant discrepancy compared to the business models used in the West and in Asia.

"World of Warcraft, for instance, generates significant revenue for Activision in Europe and North America on a subscription basis. But in China, despite a large 'subscriber' base, the revenues are far smaller: it's more of a pay-as-you-go model (prepaid game cards). This also creates a greater reliance on 'cloud' or server-based games," said analyst Michael Inouye.

"In China, Korea, Vietnam, and elsewhere the rules are more exacting in what they allow. Some games for instance, have had to alter their content: using WoW again as an example, the developers had to remove the virtual blood," he added.

The study, entitled Gaming in the Cloud, also highlights lesser known trends, such as Free: a French broadband and IPTV provider that has partnered with Intel to develop an advanced set-top box called Freebox Revolution. The device includes an Intel Atom processor, controller with gyroscopic inputs, Blu-ray player, powerline adapters, Wi-Fi, and a game controller.

Inouye describes mobile gaming on smartphones as 'disruptive' and warns that the fragmented market continues to present difficulties for developers supporting a wide number of platforms. The server and data centre demands implied by the increasing penetrations of cloud gaming is also highlighted as a future issue.

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