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Playing games online is still a more popular activity in the U.S. than watching short video clips or visiting social networking sites, according to Casual Gaming market Update report from Parks Associates

Online Gaming Remains Popular

Thirty-four percent of U.S. adult Internet users play online games weekly, compared with 29 percent who watch short online videos and 19 percent who visit social networking sites.

 "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 percent higher than the growth rate for users of social networks, which was 46 percent. The growth rate for frequent users of video sites was 123 percent, which could challenge the gaming industry in attracting 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."