The games console wars are over with Sony's Playstation 2 emerging victorious, according to the hi-tech market research firm In-Stat/MDR.

It says the PS2 is on course to remain the best-selling games console, with Nintendo's GameCube and Microsoft's Xbox trailing far behind.

InStat predicts that there will be almost 120 million PS2s in homes across the world by 2006, crowning the console's position as the market leader.

"The video game console business is increasingly big business," says Brian O'Rourke, a senior analyst with In-Stat/MDR.

"The year 2001 saw total video game revenue surpass movie box office receipts in the US for the second consecutive year, and shipments are expected to increase substantially in 2002."

Games champion

Sony has built an unassailable lead in the console wars. It launched its PS2 console more than one year earlier than its competitors.

Console sales by 2006

Playstation 2: 118.2 million GameCube: 54.1 million Xbox: 43.8 million

Since the console went on sale in March 2000 in Japan, more than 40 million units have been sold worldwide.

"Sony used the experience gained from the original Playstation, its year-plus head start to market, and its formidable marketing operation to create the fasted-selling game console in history," said the In-Stat report.

"And Sony will not lose that advantage in this generation of consoles. It has the largest installed base in all the regions of the world, sells the most software, and has one of the best marketing organisations in the consumer electronics business.

"Sony will be a very difficult champion to dethrone," said In-Stat.

Recent price cuts have intensified the competition between the consoles. Gamers can look forward to further reductions, as Sony seeks to maintain its dominance, and Microsoft and Nintendo battle for second place.

Online gamble

People can also expect big changes in how they use their consoles, with the development of next-generation consoles and online gaming.

Gamers will be able to play Halo on the Xbox online

Playing against friends or foes over a fast internet connection is seen by many as the next big thing in gaming.

All three consoles are planning to go online, with Microsoft investing millions in a dedicated network.

Analysts are cautious about the prospects for online gaming.

"The next few years will be an experimental phase in online console gaming, when the three companies will be trying to figure out what works, what doesn't, and how they can make money," said the In-Stat report.

"The market should begin to emerge more clearly with the introduction of next generation consoles in 2005. Online gaming will likely be a core function of this next generation of consoles."

The new consoles are expected to give a big boost to online gaming, with more than 11 million gamers forecast by In-Stat to be online by 2006.