Gaming Remains the Most Popular Online Entertainment Activity (thanks FiringSquad) has the results of a study indicating that gaming remains the most popular online activity, though this is fueled by the bejeweled world of casual games:

“Despite the growing popularity of YouTube, MySpace, and Facebook, gaming remains the king of online entertainment, driven largely by casual gaming activities,” said James Kuai, a research analyst at Parks Associates. “Gaming also has business advantages. Unlike sites for social networking and video streaming, which rely solely on advertising revenue, casual gaming has more mature and heterogeneous revenue models, including web-based and in-game advertising, try-before-you-buy, subscriptions, and micro-transactions.”

The year-over-year growth rate for frequent online gamers was 79%, significantly higher than the growth rate for users of social networking (46%). However, the growth rate for frequent users of video streaming sites was 123%, which could pose a significant challenge to the gaming industry in capturing the online leisure time of Internet users.

“The casual gaming industry cannot rest on its laurels,” Kuai said. “In order to counter the growing competition from other online activities, the industry needs to continue to grow its fan base and find ways to better monetize its existing audience.”

Casual Gaming Market Update provides in-depth analysis of the current dynamics and future direction of the rapidly growing casual gaming industry, including quantitative forecasts, competitive analysis, consumer perspectives, and profiles of leading companies in the casual gaming value chain.