Video games aren't just for kids and geeks anymore. Not only have I seen statistics that suggest otherwise, but personal experience bears this out as well. See, I've developed a rather serious MMORPG (massively multiplayer online role-playing game) habit myself.

I'm no geek
You may laugh, but my relatively new, perfectly harmless (I hope!) habit has convinced me that gaming is increasingly going mainstream. Many of the players I have encountered have careers, families, and generally seem to be a lot older than the stereotypical teenage gamer.

The stats back up these observations. According to the Entertainment Software Association, the average gamer is 30 years old and has been playing video games for nine and a half years. According to the data, 43% of game players are female, and women over 18 make up a greater percentage of the game-playing population than boys aged 6 to 17. This is a demographic with money to spare.

The business side of the buzz
Video games are by no means new -- remember Pong? Then came Atari (NASDAQ:ATAR) and Nintendo, and now we have Sony's (NYSE:SNE) PlayStation and Microsoft's (NASDAQ:MSFT) Xbox. But increasing broadband adoption and the ability to use the Internet to play with and against others around the world have supercharged the industry.

World of Warcraft , for example, currently boasts a staggering four million-plus players worldwide. Blizzard Entertainment, owned by Vivendi (NYSE:V), said that at any given time, 500,000 subscribers are online. The rise of a service called Xfire also suggests how dedicated gamers are to their hobby. Xfire is a free messenger program that allows gamers to see which games their friends are logged into at the moment, and also enables friends to chat within games, among other things. Through little more than word of mouth, it has garnered two million registered users since its launch in January 2004.

To monetize this phenomenon, companies charge players a monthly subscription fee. Considering the addictiveness of some of these games, that's lucrative to say the least.

The increase in the popularity of gaming is negatively affecting other segments of the entertainment industry. Entertainment Software Association data show that gamers watch less TV, take in fewer flicks at home, and rarely go to the movies. As longtime Fool Rick Munarriz recently noted, it's only a matter of time before advertisers insert their messages into these virtual worlds, bolstering gaming revenues even more.

Get in the game
Fool co-founder and Motley Fool Stock Advisor analyst David Gardner identified this growing trend before the broader market picked up on it. As a gamer and early adopter himself, he recommended manufacturer Electronic Arts (NASDAQ:ERTS) way back in 2002, and it has nearly doubled subscribers' money since then.

David remains confident in the industry's prospects and is currently building a gaming keiretsu -- a network of related stocks that bolster one another. Within this network, he has identified quite a few additional industry picks, including Activision (NASDAQ:ATVI) and Electronics Boutique (NASDAQ:ELBO). There are also the less obvious players -- chip makers, processor designers, and retailers. A close look at David's list of picks reveals many companies that fit into this video-game keiretsu.

And if you're still skeptical, just take a look at how these companies have performed over the last three years:



Net Earnings



Electronic Arts










Electronics Boutique





Keiretsu Average





*Data annualized. Raw data provide by Capital IQ.

These are numbers that would make any investor happy, and the industry is positioned to gain even more momentum. As it stands, the computer and video-game industry has already boosted sales 21% in the first half of this year to $4.1 billion. Catalysts include the increasing number of players as well as a soon-to-launch slate of next-generation consoles.

Regardless of whether video games appeal to you as a pastime, give some thought to them as an investment. For ideas on where to start, you can gain access to all of David's Stock Advisor picks by taking a 30-day free trial to the newsletter service. Together, David and his brother, Tom, are beating the market by more than 40 percentage points, and they can help you stay ahead of the market as well. Click here to learn more. There's no obligation to subscribe.

Electronics Boutique, Activision, and Electronic Arts are all Motley Fool Stock Advisor picks.

Alyce Lomax does not own shares of any of the companies mentioned, but she's old enough to remember Pong, the game that started it all. The Fool has a disclosure policy.