A gaming guru has predicted that the supply of new games for the Wii, XBox 360 and PS3 could DRY UP unless online gambling profits fund their development.

Former Sony CEO Chris Deering says just three in 10 games currently being produced for major platforms even cover their costs and warns that something is “going to have to be there to make up the difference”.

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He told industry bosses gathered at the Edinburgh Interactive Festival: “Gambling will become a source of development funding — perhaps not directly, but this area can provide some sources of income which eventually be directed back to the developer.”

Deering claimed the worldwide audience for gaming could be 2.5 billion by 2011 — or more than ONE IN THREE people on the planet.

And he predicted “traditional” games platforms like DS, Wii and PS3 would hit a total installed base of 500m by 2011 with alternative mobile platforms and gaming PCs accounting for a billion users each.