Specials

A review of China's video game industry

By Song Jingli (chinadaily.com.cn)
Updated: 2011-02-14 17:23

Editor's note: China is a huge market for video games companies but the market may not be expanding that fast from now on.

The trend

Fewer Post-90s may end 'golden days' for gaming companies

China's online gaming companies embody the negative impact brought on by a small Post-90s generation population, China Business News reported Thursday.

At the China Gaming Industry Annual Conference in January, gaming giants like Tencent, Netease and Shanda Interactive Entertainment Ltd all reported 2010 was their most difficult year, according to the CBN. The industry's growth rates slowed during each of the past three years. And a report by iResearch Consulting Group shows that growth in China's Internet game market slowed the most in 2010. The industry grew only 21 percent in 2010 to 32.74 billion yuan. [Full Story]

Related Readings:
 China has 265m online game users: blue paper

Online game industry levels off, insiders say

Government officials and China's online game providers said on Wednesday that the industry will not sustain rapid growth if it fails to innovate and rid itself of repetitive online games, repeating the challenge the 30-billion-yuan ($4.55 billion) industry faces.

China's online game market, which expanded rapidly over the past 10 years, has entered a "steady" development curve and "needs to solve problems that used to be less noticeable during the fast market expansion", said Sun Shoushan, deputy director of the industry regulator, General Administration of Press and Publication (GAPP). [Full Story]

China's online game revenue tops the world

China's entertainment and media industry may grow by an annual rate of 12 percent, far higher than the global average rate of 5 percent, to hit $133 billion in 2014, according to a new report released on Tuesday.

The country's entertainment and media industry ranked as the world's fourth-largest in revenue last year, following the United States, Japan and Germany, said accountancy giant PriceWaterhouseCoopers (PwC) said in its latest global entertainment and media outlook (2010-14) report.

PwC China partner Pan Chenyu said China is now the world's largest online gaming market, contributing one-third to the global revenue in this sector in 2009, or 56 percent of the Asia Pacific total. [Full Story]

Game shop owners playing for time

A woman holds a Kinect console at a shop in Gulou Dongdajie in downtown Beijing, a 1,098-meter street frequented by console game enthusiasts who travel there to buy the latest on-screen craze from the many specialist shops. The road that leads up to the tourist site of the Drum and Bell towers is known as the capital's console game street. [Photo / China Daily]

Wang said the peak for console game shops was between 1999 and 2000 when there were as many as 80 in the area.

Yin Yan, who is now in his 30s, is one of the many who entered the console game business in the 1990s.

"When I was a child, my dream was that my brother-in-law would open a console game shop but it ended up being me who did it," said Yin, who began his business 14 years ago.

Yin says the "golden age" of console games is over and business is getting harder and harder. [Full Story]

For consoles, game not over

China's online gaming industry is undoubtedly one of the fastest growing Internet businesses in the country, but it still has a couple of years and a gap of billions of yuan before it ousts its traditional rival - video game consoles - from its position of leadership.

This despite the fact that with the exception of the Nintendo DS, the sale of video game consoles in China has been banned since 2000. Most video game consoles in the Chinese market are in fact the real thing, but they are mostly imported illegally or supplied by console makers who buy proprietary chips used in the actual systems. [Full Story]

China's own products dominate online game sales

China's online game industry generated 32.37 billion yuan ($4.9 billion) in sales revenue last year, of which 59.6 percent came from the country's own products.

The statistics were released in a report during an ongoing annual conference of China's online game industry, running from January 18 to 21. [Full Story]

 Online gaming operators pitch joys of simplicity

Tencent Holdings Ltd and Shanda Games Ltd, China's two biggest online game operators, are pitching the joys of simplicity.

Sales of games that can be played with just a Web browser and do not require specialized software are growing three times faster than traditional multiplayer role-playing titles in China because they appeal to a broader audience, said Eric Wen, head of Internet research at Mirae Asset Securities Co in Hong Kong. [Full Story]

Game players in the gaming industry

Wii rocked by corp's Xbox factor

Sales of Microsoft Corp's Xbox 360 have been overtaking Nintendo Co's popular Wii in Beijing's games console market, mainly boosted by its motion-sensing Kinect controller.

Kinect, launched on Nov 4 as an add-on for Microsoft's Xbox 360 console, has seen its sales on the rise after it hit the gray market in China two weeks after its official launch. [Full Story]

Nintendo's secrets

A Nintendo Wii game console on display while customers play a video game at a Wal-Mart store in Secaucus, New Jersey. The market has cut down the price for sales of Wii due to the strong competition from Microsoft's Xbox 360. [Photo / Bloomberg]

Nintendo's award-winning home console - the Wii - changed the face of global gaming. While many expected Sony and Microsoft to dominate the market, Nintendo shocked them all with the launch of their revolutionary product. But the story of this secretive, low-profile company has rarely been told.

How did a struggling Japanese family company, which began as a playing card business some 120 years ago and now has a market capitalization of around $40 billion and a stable of iconic characters, games and consoles, come to dominate one of the world's most fiercely competitive industries? [Full Story]

Eedoo to get in the tech groove eight months late

Eedoo Technology Ltd, the video gaming unit of PC maker Lenovo Group Ltd, said it intends to launch its first game console without a remote control by June, according to officials in the company.

The timing of the debut has been delayed for several months. Eedoo previously planned to release the product last November. Jack Luo, chief executive officer of the company, said Eedoo needed time to "further improve the product and provide a better user experience". [Full Story]

Tencent Holdings to launch $760m games fund

Tencent Holdings, China's largest Internet firm by market value, plans to launch a 5 billion yuan ($760 million) fund to invest in online games, social games and mobiles games, Reuters reported Tuesday, citing the Shanghai Securities News. [Full Story]

Japan's Gree to tie up with China's Tencent Holdings

Gree Inc said on Wednesday it will form a business alliance with China's Tencent Holdings.

The Japan based social newworking site said the tie-up would help to give it access to China's growing market for mobile games. [Full Story]

Online gaming giants target China

Employees of Ubisoft Shanghai try the company's newly developed games. The industry has grown with foreign companies such as Ubisoft investing in the Chinese market and training developers. {Photo / China Daily]

The Chinese video game industry is growing up and changing the face of the gaming world.

"The Asia-Pacific region and Europe should end up taking 90 percent of online and mobile revenue," says Tim Merel, co-founder of the London-based digital media investment firm Digi-Capital. "If you aren't in China, you aren't anywhere."

The Chinese online and mobile gaming industry is expected to earn more than 28 billion euros in revenue by 2014 and China will account for half of that pie, figures from Digi-Capital show. [Full Story]

The9 eyes growth chances in mobile Internet market

The9 Limited, a Nasdaq-listed online game operator and developer in China, has begun to focus on business opportunities in mobile Internet, by introducing and localizing OpenFeint, the world's largest mobile social gaming platform for iPhone and Android phone users.

The company officially launched the Chinese version of OpenFeint on Tuesday, which will continue to be open-source and free to developers and players, according to Chris Shen, general manager of the mobile business unit of Shanghai-based The9. [Full Story]

Shanda Interactive on the prowl

Chen Tianqiao,Shanda CEO said the company will focus on integrating its different media platforms.

Shanda Interactive Entertainment Limited, China's second largest online game company, will focus on integrating its different media platforms while looking for possible acquisitions this year, in an effort to strengthen its portfolio.

"We will put most of our energy on business integration this year and meanwhile, seize potential acquisition opportunities if any," Chen Tianqiao, chief executive officer of Shanda, said during a conference call on Monday. [Full Story]

China's Shanda Games to acquire US Mochi Media

Shanda Games Ltd., a Chinese online gaming company, said Tuesday it will acquire US-based Mochi Media, Inc., in its latest move to expand worldwide.

Shanghai-based Shanda said in a statement that it expects the acquisition of the San Francisco-based games platform to widen its global distribution.

The acquisition involves $60 million in cash and $20 million in shares, it said. [Full Story]

NetEase profits rise 3.9% in 2Q

China's third-biggest online game provider NetEase.com Inc said Thursday its net profit rose 3.9 percent year-on-year to 486 million yuan ($71.70 million) in the second fiscal quarter as incomes from online games and advertising surged.

Total revenue for the period was 1.3 billion yuan, an increase of 49.08 percent from one year earlier. [Full Story]

NetEase calls halt to new WoW account registration

Online game interface shows the information of World of Warcraft - The Burning Crusade. [Asianewsphoto]

The nation's third-largest online game operator NetEase.com suspended new user registrations for World of Warcraft (WoW) in China, the company said in a statement on its website yesterday.

China's publishing regulator, the General Administration of Press and Publication (GAPP), yesterday accepted NetEase's reapplication for a license to operate the popular game and indicated it would begin processing the request.

The move may signal an end to a regulatory turf war over the country's lucrative, online game market, according to experts. NetEase officials were not available for comment yesterday. [Full Story]