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Online Games A Cash Cow for Websites
One of China's largest software companies began promoting an animation and computer graphic training school run in conjunction with Canada's College of Interactive Arts to local students over the weekend, providing more evidence that online games are quickly becoming a booming business on the mainland.

Professional computer animators will be in high demand in the future in China, executives with the Shanghai-based training center said.

Online games are already proving to be a cash cow for domestic Websites, which currently earn far more money from games than they do from advertising.

"Short message services were the first money maker for Internet companies, online games are the next one," said Mao Daolin, chief executive officer of Sina.com, one of four Nasdaq-listed Chinese Internet portals.

Mao says online games are already a billion-yuan business, earning portals twice as much money as online advertising.

And the market is set to get much bigger, said industry analysts.

CCID Consulting Co. Ltd., a leading mainland information industry research company, anticipates China's online game market will grow by 120 percent annually over the next three years to post yearly sales of 3.26 billion yuan (US$392.77 million) in 2004. By the end of 2004, China's online gamer population will jump to 31.5 million from the current 9.3 million, accoun-ting for 35 percent of the total 90 million Chinese Internet users, the firm said.

"Online games are more reliable sources of income than traditional computer games or console games, as they can not be pirated," said Danny Lu, president of Beijing Windthunder Era S&T Ltd.

Windthunder has just set up a center in Nanjing to design online games.

While the games are producing impressive revenue streams, most of the profits are being reaped by South Korean game vendors that produce China's most popular online games, including the Legend of Mir, the favorite game of mainland Web surfers.

Some 60 million people on the mainland have registered to play that game, and there are approximately 300,000 people playing the game at almost any hour of the day.

Users pay 35 yuan for 120 hours of access to the game, with the money split between game developers and Websites that host the game.

Local companies want to start developing games domestically to keep the revenue in China and improve the quality of games available to players.

"We don't have enough developers. Each online game needs a team of at least 30 programmers, story writers and professional animators," said Chen Guang, general manager of asiagame.com, a domestic company that offers three South Korean online games and has reportedly attracted 10 million registered users.

But the situation is set to change. Netease.com, anther Nasdaq-listed Internet portal, isn't happy co-operating with South Korean developers. "When some users started using cheating programs, (the Korean developers) response was too slow and we had to delete 100,000 identifications belonging to cheaters," said Wang Zhiwei, an executive of the online game department of Netease.

"The online game developed by our team is more reliable and few people can break into it. In the future, we will mainly run self-designed games."

(Shanghai Daily November 18, 2002)

Companies Hope to Score Big with Chinese Gamers
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