Operating game servers has become a popular past time over the past two years. A game server is a dedicated server software application that allows online gamers to gather at one location in cyberspace to play against one another. Game servers are designed as a standard component that is built into most multi-player games.

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Hosting companies have begun to specialize in offering dedicated gaming servers to enthusiasts and businesses alike. Online gaming can be divided into two classes: Games that are available from centralized servers and those that run on distributed servers.

Centralized servers usually house games that allow thousands of users to participate at the same time, as in the case of massive role-playing games. For these games, most of the information about the environment is contained on the central server. The game world exists 24 hours a day, so the game continues regardless of whether a given user is participating or not. Users launch client software, which then logs on to the game's master server. Large entertainment conglomerates and collectives provide most of these games.

Enthusiasts and small business owners can run game servers on the distributed server model. In the distributed model, server software resides on several dedicated game servers. Real-time strategy games use this model. Real-time games require more frequent world state updates via messaging. Distributed servers spread the load of messages out, and use a master server to coordinate messaging between all the distributed servers. As a result, these gaming environments require low-latency and excellent "ping time" rates, ensuring rapid speeds at which commands reach the server and return to the player.

Players normally choose a server with the shortest ping time and then connect directly to the game server. As a result, hosting firms that offer game servers need to connect them to the fastest and most robust network connections available. Game servers also need to be tweaked for the best operating system and application configurations, and security must also be given due consideration.

Hosting companies specializing game servers therefore provide supercharged server and network deployments with applicable gaming software. Servers available to gamers on the distributed model include popular games such as Counter-Strike, Call of Duty, Day of Defeat, Doom 3, Half-Life, Natural Selection, Medal of Honor: Allied Assault and Spearhead, Battlefield 1942, Halo, Unreal Tournament 2003, America's Army, Quake 3, Return to Castle Wolfenstein and Enemy Territory.

Many pure-play hosting companies have cropped up to deliver game server offerings. Traditional hosting companies such as C I Host have also launched their own gaming divisions to supply game servers to the retail marketplace.

C I Host and other hosting firms dedicated more directly to gaming have invested in providing these services because the online gaming market is poised for explosive growth.

In-Stat, a research firm that covers the full spectrum of advanced communications, predicts that the total online gaming marketplace will grow from just over a billion dollars in 2003 to nearly $4 billion by the end of 2008. The research firm expects that this revenue growth will be fueled by advertising, and by millions of new players that are expected to participate in online games by 2008. In-Stat believes that roughly half of the US populous will participate in online games by 2008, with the massive multi-player online role playing game population peaking by 2005.

"To this point, OLG has been stifled by the fact that a typical gamer is currently paying over a dollar an hour to play video games," Eric Mantion, a senior analyst with In-Stat/MDR, "whereas the typical TV viewer is paying about 13 cents an hour." Mantion believes that advertising sales will be able to lower end-user costs in the online gaming world in the very same fashion it has done for commercial television. "When the costs of OLG per hour starts to approach the level of TV, you can expect people to spend a comparable amount of time gaming.

In-Stat/MDR isn't the only company that believes online gaming will grow. The foremost authority in TV ratings, Nielsen, has started to develop metrics to analyze the use of ads in games. Once the metrics are in place, the revenues will follow, says Mantion. "The secret strength of online games will be when the volumes of people playing grow to the point where advertisers will start buying ads that will not only be interactive, but also targeted at specific demographics of players."

The NPD Group looked at players and found that two-thirds of surveyed 13 to 44-year-old were using their personal computers instead of gaming consoles. The study found that online gamers spent more time playing PC games online than offline (60 percent compared to 40 percent), while the opposite was true for connected console gamers.

With so much growth and usage anticipated around online gaming, the sector is expected to offer a revenue boom for service providers, and a range of inexpensive server options for consumers. Presently, some gaming servers can be leased for $30 per month, which is cheaper than many entry-level dedicated servers.