Online Gaming Grows as Retail Gaming Wanes

PlaysushiPlay Sushi, a gaming portal, has attracted 3 million visitors less than three months after launching, reports site owner Future Ads, yet another example of the explosive growth taking place in the free online gaming space. Sites offering free games clocked 87 million U.S. visitors in May 2009, according to comScore, a 22 percent year-over-year increase. And the rise is clearly coming at the expense of the retail-driven side of the game industry. According to NPD, sales of game-related hardware and software dropped 31 percent in June over the same month in 2008, continuing a downward slide that has been underway for months.

The recession is an obvious culprit, pushing consumers with lighter wallets away from store shelves in search of free gaming on the web. While retail games had previously been considered recession-proof, the quality and variety of free online games has been steadily improving. But this is part of a larger trend, one that’s already impacted recorded music, movies/TV, and print publications: When costly physical media comes into direct competition with free digital delivery on the Net, the latter eventually wins out.