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Video Game Makers Challenged by the Next Wave of Media

SAN FRANCISCO - Booming video game sales are masking a serious concern for game makers: their economic model is in peril. Game companies are taking in more money, but, in many cases, not profits.

The market has expanded greatly, with more women and older gamers playing. People are playing on consoles, computers, cellphones and hand-held gadgets. But a proliferation of free or low-cost games on the Web and for phones limits how much the major game publishers can raise prices. It also diverts attention from the game consoles, like the PlayStation 3 from Sony and the Xbox 360 from Microsoft.

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