Adweek notes (with some irony) that gaming has been far more popular than online video for quite a while:

More than one third, or 34 percent of users in the U.S. play games on the Internet at least once per week. That number bests the two most hyped online activities of the past few years, as 29 percent of users watch videos on a weekly basis and just 19 percent visit social networking sites that often, found Parks.

Casual online games are a ‘Killer App’ for advertisers online because people spend so much time playing them. The longer they play, the more ads they will see. Videos are certainly popular but the short clip lengths make it difficult to embed adverts. Ironically, the study cited time spent on social networking sites as competing against gaming but some of the most popular sections of social networking sites are the gaming areas. Just take a look at some of the most popular Facebook apps if you don’t believe us.

Perhaps then, its not surprising that MTV just announced a half-billion dollar online gaming initiative:

MTV Networks plans to invest well over $500 million in video games, seeing the red-hot entertainment category as a major pillar of growth in its goal to reach consumers wherever they spend time.

The two-year investment is part of a global strategy to incorporate games development at the inception of all new programming plans and not as an afterthought, executives say.

Some critics point out that while gaming has the edge today, growth in video watching will eclipse gaming in the future. These critics are missing out on one secret: people are not interested in a majority passive experience in front of their computers. The Internet enables interactivity and games are the ultimate form of interactive entertainment.

Video may rule the livingroom but games dominate on the computer.