By Joe Little

Video games’ ability to launch new music and artists today is not only providing a key medium for reaching new listeners, but also a potential significant revenue stream for recording companies in 2005 and beyond.

“If iTunes were the story in 2003, then video games are the story this year as major recording companies found that soundtracks for new games introduced new music to listeners almost more than any other medium,” said Shahid Khan, a managing director with BearingPoint, Inc.

Khan also stated that analysts forecast the videogame business will overtake the music industry by 2006. Digital music downloads, digital radio, video and network games, and ring tones are all becoming mainstream revenue streams for recording companies.

“The gimmick phase is over and the music industry is actively building strategies, operations and underlying technologies to incorporate these channels in their business models,” Kahn said.