A new report from Parks Associates forecasts that the big three console manufacturers will generate $8 billion in revenue from online content and services in 2013.

The report takes into account revenue streams from digital distribution of video and game content, multiplayer gaming services, dynamic in-game advertising, virtual worlds and avatar-based microtransactions.

“Broadband connectivity, now a common feature for game consoles, is a key enabler for new business models,” said Michael Cai, director of broadband and gaming at Parks Associates. “Among the different online revenue opportunities, digital video distribution and downloadable games and content are the most promising.”

Microsoft currently dominates the online market, ‘but Sony and Nintendo are gaining ground as they ramp up their base of connected customers and diversify monetization methods’, says the report.

“Led by Microsoft’s success in Xbox Live, all three console makers are dreaming up many innovative offerings to entice console households to get connected and spend more money,” Cai added.