Americans are turning to cheap alternatives to expensive video games by finding interactive games online. These game are usually much less expensive to play that the ones consumers have to buy for Nintendo Wii, Sony (SNE) PS3 and Microsoft Xbox 360 consoles. That may be bad news for these video platform businesses, but it is very good for the websites that provide most of the online products.

According to online research company comScore, Yahoo! (YHOO) Games has a significant lead in this business. The site has 19.39 million unique visitors in May, up 6% from the same month a year ago. It is one of the few bright spots the Internet portal can point to in its turnaround effort.

In second place is EAOnline with 17.99 unique visitors, the Internet destination of huge video game company Electronic Arts (ERTS). Whether this destination undermines the sales of the company’s more expensive console-based games is open to question. EA may take the position that it is better to keep customers on the Internet rather than losing them completely.

Disney (DIS) Games ranks fifth with 11.72 million unique visitors in May down 3% from the year before. It is followed by MSN Games (MSFT) in 6th place with8.99 million uniques and AOL  (TWX) Games with 8.7 million.

Some slightly smaller sites posted the biggest improvements year-over-year. BetaWave uniques were up 90% to 7.41 million. Spil Games rose 65% to 7.16  million, and GSN Games was up 563% to 6.03 million.

The figures make two things clear. Large video game companies are faced with strong competition from online gaming and the strength of the independent sites makes them ideal acquisition targets for the larger portals that want to pick up market share in the industry.

Douglas A. McIntyre

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