- Paul Bond

LOS ANGELES The economic uncertainty that is hampering most media won't stop growth in videogames.

Revenue generated in the U.S. and Canada by the videogame industry, minus hardware sales, will grow at an average clip of 5.8 percent annually over the next five years, according to a new PricewaterhouseCoopers analysis.

Such growth prospects exceed that of most other media, with notable exceptions being online advertising and Internet access, the latter driven by a continuing shift from dial-up to more expensive broadband.

Revenue from PC games will continue to decline, but console, handheld and wireless games will more than make up the slack. Plus, in-game advertising will lead the category, with 13 percent growth annually for the next five years.

Videogame advertising, which generated just $30 million in North America in 2004, will grow to $886 million this year and to $1.4 billion in 2013, according to PwC.

Advertising in games is more diverse, innovative, accountable and targeted than competing venues, said Stefanie Kane, a partner at PwC's entertainment and media practice.

The report says the videogame industry -- sans hardware -- in North America will bring in $17.2 billion in sales this year, growing to $21.6 billion in 2013. By then, the video game industry will be three times larger than the recorded music industry, which is expected to sink 4.4 percent annually to $7.2 billion in 2013.

By further comparison, filmed entertainment in North America will rise 3.4 percent a year to $45.1 billion in 2013, and the biggest media segment -- TV subscriptions and license fees -- will grow 5.4 percent annually to $97.3 billion in that time frame.

Kane said that the "unlimited hours of fun" after an initial purchase of a game is one reason that cost-conscious consumers will keep buying videogames even in economic rough patches.

She also said that games are beginning to transcend demographics, with casual games being played by older generations and females, even if hard-core gamers remain young males.

Globally, the videogame market will grow at a 7.4 percent compound annual rate to $73.5 billion in 2013, according to PwC.

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Nielsen Business Media