massively multiplayer
Chinese Game Market Grew to $US 1.66 Billion In '07
Posted by Maggie Greene at 7:00 AM on March 23, 2008
Pearl Research has released their latest report and forecast on China's market and has come up with some pretty astonishing numbers. A quick rundown: the market grew 60% in '07, reaching $US1.66 billion; they predict the market will exceed $US 3 billion by 2010; domestic games are getting as many as 1.52 million concurrent users. It's no secret the market is huge in China and continues to grow, but those are some pretty impressive numbers (and a lot of zeros). The full press release, with some extra details, is after the jump:
Games Market in China Grew 60% to $1.66 Billion in 2007, Expected to Exceed $3 Billion in 2010, According to Pearl Research
SAN FRANCISCO--(BUSINESS WIRE)--Pearl Research forecasts the online games market in China will exceed $3 billion in 2010. The market grew more than 60% to reach $1.66 billion in 2007. These findings are contained in Pearl Research's exclusive 130-page "Games Market in China" study.
Allison Luong, Managing Director of Pearl Research said, "The year 2007 exceeded expectations with the market growing more than 60%, driven by compelling and diverse content, free-to-play games, and rising demand for leisure and technology products. Chinese-themed and advanced casual games are expected to drive revenues in 2008 and beyond."
"A key trend to track in 2008 is rising average-revenue-per-user (ARPU). Certain online games are reaching $7 to $12 a month in average-revenue-per-user, significantly higher than past averages of $5 or less per month. I believe there is still room for average-revenue-per-user to grow, as game operators enhance monetization efforts from free-to-play games," said Allison Luong.
Pearl Research's key findings:
China's most popular online game, Netease's "Fantasy Westward Journey" has 1.66 million peak concurrent users, followed by Giant's "Zhengtu Online" with 1.52 million peak concurrent users. Successful MMORPGs can be highly profitable. Game operator Giant Interactive generated the majority of its $209 million revenues from one title, "Zhengtu Online."
Game operators in China experienced strong revenue growth in 2007. The biggest gainers were game operators Shanda (up 49% to $338 million), Giant (up 274% to $209 million), The9 (up 30% to $175 million) and Perfect World (up 593% to $95 million). Coinciding with this revenue growth was a wave of initial public offerings (IPOs) by game operators Giant, Perfect World, NetDragon and KingSoft.
The study also contains highlights from Pearl Research's Phoenix Generation research initiative, consisting of more than 200 one-on-one, personalised interviews conducted with Chinese youth. One key finding is that games are a social phenomenon, with gamers often playing casual games to connect with friends and flirt with others. Gamers cite cheating and account thefts as a top reason for abandoning a game and seek out game operators with a reliable reputation.
Pearl Research's "Games Market in China" study provides an in-depth analysis of the Chinese games market. The report contains 2006 to 2011 forecasts; inhibitors and drivers to growth; deep marketplace analysis; profiles of key market players; and strategic conclusions. Please call (+1) 415-738-7660 or email research (at) pearlresearch.com to inquire about this report.

Comments (AU Comments · US Comments)
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ragfragger
Posted 8:02 PM 26/3/08
india is in for competition!
ragfragger
Allen750
Posted 8:02 PM 26/3/08
Food or games?
Allen750
trebors
Posted 8:02 PM 26/3/08
YAY! more game!! more game!! :)
more competitors = cheaper right!?
im from south east asia anyway so no effect :)
trebors
Chris3000
Posted 8:02 PM 26/3/08
@Wait: There's a distinction between Chinese and Japanese. Learn it.
Piracy is rampant in that part of the world, that much is true. So instead of trying to force the same old formula, new ways to do earn money for IPs are generated. The enormous success of free-to-play games are a prime example of this. It's just time to think outside the box, and stop focusing on things that can't be changed.
Chris3000
Byakko
Posted 8:02 PM 26/3/08
@jayntampa:
You forget that the vast majority of China's population live in under-developed rural areas. Even in the more established towns, internet is still a rather expensive and rare leisure commodity; contribution to the China's key consumption of online MMO gaming wouldn't even be significant from such areas.
So we're talking about the urban population, which at best, make up 20%-30% of China's total population.
From those, you have to take into account the middle-class and upper-class, and prolly not those from the rural areas who come to the cities to find work.
@astrixzero:
I'm a South-East Asian whose region (not country since Singapore is considered to be lawful to a fault) is often labeled as such. I can completely understand your frustration. But I think an explanation about how piracy works in both the Asian and South-East Asian regions would help to educate anyone outside a bit better.
The thing about piracy in China is that there are the bootlegs and there are the factory run-offs.
As you know, China's THE go-to place for cheap manufacturing factories. Plenty of factories there for companies from the cheapest to the most branded.
Now, in factories, if the head-honcho wants an order of 1000 bags made, the factory ISN'T going to just make 1000. A buffer zone for errors in the production process is necessary, so they may make up to 1500, of which they may bill the head company for 1250, or even lesser.
Of course, the actuall figures for production are much bigger, and finally by the sheer number of factories in China, there's enough extra goods to feed this 'secondary' market for pirated goods.
So the extras from production is sold on the side by the factory foreman through proxies, and this is what you find in those 'illegal' shopping districts in Singapore.
In other words, they ARE in fact, original products that are simply sold illegally. It's not unlike factory outlet stores in America or elsewhere, where rejected or surplus goods are sold properly by the company making them.
Of course, there are still bootlegs, but it should be noted that the disc images and files used for bootlegs often come from American sources when the companies give out the first master-copies to testers, manufacturesr etc.
Byakko
Sqrfrk
Posted 8:02 PM 26/3/08
@astrixzero: I'm sorry, American ignorance? Making a dragnet statement like that is at the of height of ignorance, American, Chinese or what have you. Don't shoot yourself in the foot at the end of your own argument.
Sqrfrk
astrixzero
Posted 8:02 PM 26/3/08
@GOLD5: Hey you even been to China? We do sell legitimate games here, often at very cheap prices. To portray China as a land of software pirates is the height of American ignorance.
astrixzero
v-rus
Posted 8:02 PM 26/3/08
Hey, they're doing good over there on their fake FFVII, Titanic: the game, and Diablo (the 8-bit version). Their Good Boys and Viis must be flying off the shelves!
v-rus
GOLD5
Posted 8:02 PM 26/3/08
Sooo, a dollar per pirated game copy means 1.66 billion games sold? WOW! ^_^
GOLD5
The_Antihippy
Posted 8:02 PM 26/3/08
@TrevWolf: [en.wikipedia.org]
The_Antihippy
Zippidydoodaa
Posted 8:02 PM 26/3/08
the growth is so heavy in MMOs. The reason? Its a lot harder to pirate in a MMO then the other forms. Say whatever they want on the social aspect or whatever, but if these gamers could get the same for free, they sure as hell will do it. Growth in China for non-MMO games will depend heavily on whether China will crack down on piracy and enforce copyrights.
Zippidydoodaa
excel_excel
Posted 8:02 PM 26/3/08
A lot of muhmorpergers
excel_excel
Fyren
Posted 8:02 PM 26/3/08
Out of 1.66 billion. 1.6 Billion has been made through semi-f2p MMO.
Fyren
creepwood
Posted 8:02 PM 26/3/08
@jayntampa: Um perhaps, I meant in general as opposed to gaming specifically and I did say becoming, not is now. As you said the big number is 60%, and growth is practically unlimited in terms of possible gamers.
I think it's only a matter of time before world manufacturers including manufacturers of videogames begin to concentrate more on targeting this market.
creepwood
Most Wanted
Posted 8:02 PM 26/3/08
Lucky they don't have to worry about lead in our games.
Most Wanted
challen
Posted 8:02 PM 26/3/08
It seems like China made the new restrictions on importing foreign culture to protect and grow it's local cultural and entertainment industries.
[www.nytimes.com]
It's very clear this press release is to attract video game business to China. Anyone doing this might want to read this article:
[www.pch.gc.ca]
I thought it was pretty interesting.
challen
Drakron
Posted 8:02 PM 26/3/08
That is a pretty damn old flag ...
Drakron
TrevWolf
Posted 8:02 PM 26/3/08
It will be interesting to see a Chinese console hit the market within the next few years to fill the gaping hole that is domestic product delivered quickly to this upcoming market.
Of course, I'm sure that investors are holding back based on Chinas anti-gaming policies and uncomfortable stranglehold they maintain over the tech industry.
TrevWolf
Wait
Posted 8:02 PM 26/3/08
Pardon me but, is that a lot. I mean there are a lot of people who live in China over 2 billion, and only that much of an increase. The US can do that in a week (Looking at release week line-up of GTAIV).
Wait
jayntampa
Posted 8:02 PM 26/3/08
@creepwood: I don't think it shows that they're a dominant force at all ... quite the opposite considering the population. What it shows is that there is a developing market there and quite a bit of opportunity, if the government allows it.
The big number isn't the money, that's nothing ... it's the 60% increase in market.
jayntampa
durrem
Posted 8:02 PM 26/3/08
Wow, that's a lot of DVD-Rs!
durrem
jayntampa
Posted 8:02 PM 26/3/08
The growth is impressive, especially with rampant piracy. However, the numbers really aren't when you consider there are 1.3 billion Chinese. Compare pretty much any other major country's gaming revenue per person and it will be many times larger. Remember, US game revenue was around $15.8 billion in 2007. [today.reuters.com]
Also, the growth was primarily through online revenue - it's the only kind of gaming that can grow in China until they get piracy under control.
It's good news, though ... that kind of growth may cause the government to take the industry more seriously, which may lead to a bigger crackdown on pirates.
jayntampa
Wait
Posted 8:02 PM 26/3/08
Perfect example of why the xbox (or any current-gen system) isn't doing quite well as far as games goes.
You look at the sale charts (software)and its mainly old games or on older consoles.
If Microsoft or any company wants to easily win, all thats is required of them is:
(1. A full supply of anime or henti porn/games, (2. A full supply of anime or henti porn/games, and (3. A full supply of anime or henti porn/games!!!!!!!!!!!!!
Wait
creepwood
Posted 8:02 PM 26/3/08
More evidence that China is becoming a dominant market force not only in manufacturing but in terms of consumption too.
creepwood
JackUH
Posted 10:25 PM 23/3/08
Kotaku using the flag/naval jack of IMPERIAL Qing China, an officially dissolved government, a fairly obscure flag.
Has the unrest in Greater Tibet caused even gamers to tread lightly around China?
JackUH