Gaming set for fast growth in new play areas

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China's online gaming industry may embrace another phase of fast development as browser game and mobile game sectors flourish and overseas markets generate more income, officials and industry researchers say.

"The development of the nation's online gaming industry accelerated in 2011 driven by the arrival of the browser game and mobile game sectors," said Sun Shoushan, deputy director of the General Administration of Press and Publication. Revenues gained by the online gaming market totaled 42.85 billion yuan ($6.8 billion) last year, up by 32.4 percent year-on-year, according to the administration's statistics.

The total revenue of China's online gaming market is expected to hit 55.7 billion yuan in 2012, boosted by broadband Internet development and a favorable economic outlook among the nation's second- and third-tier cities, said a report released by research company Analysys International.

The research firm also estimated that the Chinese online gaming industry is likely to keep expanding at a rate of between 20 and 25 percent in the following three years, which means it is likely to reach 82.6 billion yuan by 2014.

Revenues of the nation's online PC game market exceeded 10 billion yuan for the first time during the fourth quarter of last year, up by 8.3 percent quarter-on-quarter, Analysys International said. The top three online game distributors - Tencent Holdings Ltd, Inc and Shanda Games Ltd - cornered more than 65 percent of the market.

The size of the industry will be bigger if game developing and engineer training sectors are taken into account. The entire industry was estimated to have received more than 115.8 billion yuan in revenues last year, business website reported, citing the Ministry of Culture.

As of 2011, the entire gaming industry has about 33,590 enterprises, including more than 320 Web game developers and at least 250 mobile game developers, the report added.

Revenues for China's mobile gaming industry have surged to 1.7 billion yuan, up by 86.8 percent year-on-year, according to Sun of the General Administration of Press and Publication.

Despite the fact that the country's mobile game sector only made up about 8.9 percent of the industry's total revenue in 2011, Sun Mengzi, an analyst from Analysys International, predicted the mobile gaming revenue is expected to increase 10 billion yuan by 2014, which will drive up the market share to more than 17 percent.

However, analysts are worried that the large number of homogeneous games may hinder the industry. "Players will become more hesitant about downloading paid-for games when large numbers of poor quality games exist in the market," Sun said. "It will take another two to three years for mobile game distributors to integrate," she added.

The other power engine for the industry to develop will be browser games, a newly born Internet game type which run on Internet browsers, thanks to the development of online graphics technology such as Flash and Java. In 2011, revenues generated by browser games were barely more than 5 billion yuan, but Sun of Analysys estimated that the sector could easily double revenues by 2013.

The categories of China's browser games have diversified over the years. Between 2009 and 2010, strategy war games dominated the industry but took only 36 percent of the market by the end of 2011. "Browser-games have made the market colorful as new game types, such as role-play games and easy-to-learn casual sports games, were developed," said Analysys International.

Moreover, furious competitions in the Chinese mainland market may have stirred the game developers' interest in overseas markets. Chinese online game giants have taken steps to embrace the global market.

The nation's leading online game developers and operators, including Shanda Games, The9 Ltd and Giant Interactive Group Inc, announced their own overseas strategies for their browser-game departments as early as 2010. Major overseas markets include South Korea, Taiwan and Vietnam.

Alan Qunzhao Tan, chairman and chief executive officer of Shanda Games, announced in November that he plans to lift the company's overseas revenues from about 5 percent in 2011 to 20 percent three years later, reported.

A total of 131 Chinese online games, produced by 34 developers, entered the overseas market in 2011, Xinhua News Agency reported, citing Sun of the General Administration of Press and Publication. The overseas market helped to generate $360 million in revenues for Chinese developers in 2011, a jump of 56.5 percent year-on-year.

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