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RALEIGH, North Carolina (Reuters) - The video game industry has weathered the economic slowdown better than most industries, but there could be a reason -- free games with new figures showing up to a third of gamers don't pay to play.
More people are getting into gaming through free titles like Zynga's "Treasure Isle" played online through social networking sites like Facebook, downloading free games like ngmoco's "Godfinger" on mobile devices like iPhone and iPad, or sitting on a friend's couch to play multiplayer maps with titles like Activision Blizzard's "Call of Duty: Modern Warfare 2."
New research from video game tracking firm Newzoo found every existing video game platform from mobile to console has an audience of at least 30 percent of non-paying players.
"The shift toward online business models servicing a broader range of target groups started before the recession and has resulted in continued growth through the rough economic times in terms of revenues," said Peter Warman, managing director and founder of Newzoo.
"The platforms offering free-to play-gaming options like massively multiplayer online (MMO) games, mobile games and casual game portals lare successfully converting players to payers."
PopCap.com, a leading game maker in the $3 billion casual games industry, offers free versions of its games like "Bejeweled Blitz" on Facebook, as well as its own site.
"Our belief is that by allowing customers to experience our games for free it's a good way to guarantee customer satisfaction, as they have been able to play the game pre-purchase with the promise of lots more fun to come," said Paul Breslin, general manager, Popcap.com.
The "Newzoo Games Market Report" said one-third of the $25.3 billion that U.S. gamers spent on video games in 2009 came from online revenues (MMOs, game portals and mobile devices) and the digital distribution of console and PC games.
The U.S. currently leads the world in online business revenues, but Warman believes the EU and other territories will continue to grow gaming revenue in this arena moving forward.
"These free options are definitely broadening the appeal of video games among older and female demographics, and a lot of these consumers don't actually consider themselves gamers at all," Michael Cai, vice president of video game research, Interpret.
"Without casual gaming portals like Pogo, Real Networks, and Big Fish Games, many older female gamers would have never paid for gaming content."
Interpret discovered that 21 percent of the U.S. population, or over 46.1 million Americans, play social network games. Over 11 million Americans only play social network games. The median age for social network gamers is 38.8, versus 30.9, which is the median age of console gamers.
Cai found that 12 percent of these social network gamers plan on buying a Wii, which would be their first game console.
More console game makers are offering consumers free play, including downloadable game demos through Microsoft's Xbox Live Arcade and Sony's PlayStation Network Store. "Handing over free content to gamers can be tremendously beneficial to developers and publishers, even if it comes in the form of a short playable demo of a game that's not spectacular," said Patrick Shaw, features editor, GamePro Magazine.
"Often times a small taste of a game is all it takes to entice the player to purchase the full game."
Editing by Belinda Goldsmith