• by Wendy Davis , Staff Writer, February 23, 2006

Video games have long been hailed as a way to reach the elusive young male demographic. But a new report released this morning by eMarketer casts doubt on whether video games hold as much promise as marketers had hoped.

In the report "Video Games: Where to Now?" eMarketer analysts Ben Macklin and James Belcher point out that online gamers account for a very small proportion of video game players. Online console subscribers for X-Box Life and PS2 total about 11 percent of console users, according to the report.

What's more, the most popular games played by these online video gamers involve fantasy role playing, which, says the report, aren't a good environment for product placement. "If you are knee deep in the twisting nether of World of Warcraft, battling furblogs and quilboars, it just doesn't seem right that the elixir of life you see is a can of Pepsi!" states the report.

But even if marketers don't benefit from online games to the extent they had once anticipated, software manufacturers still can expect to see digital downloads surge. Overall, the report estimates that digital downloads (including subscriptions, individual game downloads and updates) will account for 22 percent of video game software revenues worldwide by 2010, up from less than 9 percent last year.