Recent reports have all stated that more Americans are playing video games than ever before, but exactly how many people are picking up a controller in America? A new "Online Gaming 2008" report from the NPD Group finds that 72 percent of the US plays video games, a dramatic increase from the 63 percent who said they played in the previous year. The amount of people playing games online, however, is much lower than expected, with 42 percent of people saying they play games online, up only two percent from last year.

Unsurprisingly, the PC plays a large part in online gaming. 90 percent of those who said they play online play through their PCs, versus only 19 percent playing on a game console or portable and three percent using a cell phone. Not only do people play online games on their PCs, they are becoming increasingly comfortable purchasing games online as well. Steam has just received Ubisoft's blessing to sell its games online, including the yet-to-be-released PC version of Assassin's Creed, and the platform was instrumental in building buzz for the hit rhythm game Audiosurf.

This is of course not even counting the runaway success of online games like World of WarCraft, a game that has almost become its own industry. The money spent on digital downloads and online subscription-based gaming is often absent from market research on the strength of the PC gaming industry, something that NPD is trying to correct; the group is now tracking online subscription sales for a quarterly report.

"We wouldn't be initiating coverage of online subscriptions if we didn't believe it was a big and growing market," Martin Zagorsek, vice president of games and software at NPD, told Video Business. The report will include information on any business with a subscription-based revenue source, which should include game arcade services like GameTap.

Still, NPD doesn't have any illusions about these numbers. "Despite the buzz in the industry regarding online gaming, it is still relatively small compared to offline gaming," said Anita Frazier, an industry analyst for the NPD Group. "There is still a large, untapped market for gaming in general and online gaming in particular."

Younger gamers are growing up to be more comfortable gaming online. Gamers aged 2 to 12 hold over 25 percent of the online gaming market, while gamers aged 18 to 24 have only 10 percent. Among consoles, Xbox Live is proving to be a powerful force for Microsoft; the Xbox 360 is the most popular console for online play. NPD does point out that households with multiple consoles are rare, with only three percent claiming to own two of the three "next-gen" systems, and only two percent claiming to own an Xbox 360, PlayStation 3, and a Nintendo Wii.

While the "PC gaming is dying!" cry is still often heard around the Internet, it seems that much of the computer gaming market is merely heading online, as evidenced by certain aspects of this report and NPD's new dedication to tracking online subscriptions. Overall, however, the gaming market is showing strong growth, but online gaming isn't nearly as large as the conversations about it would have you believe. Young gamers may bring the numbers up as they grow into an increasingly connected world, demanding the same social aspects from their games, but with online gaming there is currently more flash than fire.