The Big Three, Nintendo, Sony and Microsoft are names that almost every gamer recognises. However, in China, there are three companies that are just as big as those, and you probably have never heard of them before.
Poor Shanda. Poor Chinese game companies! A surprising number of suits have been brought against them in the past year, but this — for a more reasonable 11,000 RMB ($US 1600) — takes the current cake. Shanda froze the account of a Legend of Mir player (for unspecified reasons), who is now suing for emotional distress and the return of his virtual items:
In totally unsurprising news, China’s game market continues to climb — numbers just posted for the second quarter of 2008 show an 11.2% increase over first quarter, and a nearly 66% increase from the same quarter last year (!). In terms of market share, Shanda leads the pack with a 17.9% share, with other big companies hovering below that.
The current market is estimated to be worth 4.43 billion yuan (around $US 645 million), and with no predicted slowdowns, one wonders what we’ll be seeing this time next year (or even fourth quarter of ’08). And with companies like Perfect World making a foray into Western markets, we’ll just have to wait and see where China’s industry is heading long-term.
China market: 2Q08 online gaming services valued at 4.43 billion yuan [Digitimes via GamesIndustry.biz]
A short and sweet and mildly thought provoking piece over at Terra Nova asks the question: “Why not qualify the taking away of virtual objects as theft?” The author speaks in reference to Dutch law specifically, but a few cases have cropped up in recent months (Shanda getting sued after forgetting to return some virtual items; the case that this post was based on, where virtual theft in Habbo Hotel led to a real life arrest) that raise the question of what do you do with virtual items when they’re stolen? Slap a pair of real life cuffs on the thief’s wrists? Ignore it, since the items never left the virtual space they inhabited?
NCsoft’s Atrix, a casual online game that NCsoft describes as “a lively action fighting game,” is making its way to China after being well received in Korea last year. Shanda has gotten the exclusive license to operate Atrix on the Mainland, part of the alliance between the two Asian giants announced this past November. I wonder if having a ‘strategic alliance’ will preclude any of the messy and protracted legal battles we’ve seen between Chinese and Korean companies? You can expect the game to be popping up on PRC PCs in 2009; full press release after the jump.
The Chinese game industry is hot hot hot, and money is burning a hole in the pocket of some of the big players like Shanda. Unfortunately, the hot market has led to plenty of companies overvaluing their worth, and despite capital burning a hole in the collective pocket of the big companies, they’re starting to realise that snapping up small companies for massive prices isn’t the giant payoff they’re looking for:
Shanda – one of Mainland China’s heaviest hitters in the MMORPG world – was asked by police to remove virtual items from a player’s account during an investigation into the sale of stolen virtual items. Shanda did – then forgot to give them back like the police had told them to. When the player discovered his missing virtual items, he flipped his lid and sued them. Shanda lost and has been ordered to apologize and pay a restitution of 5,000 RMB (a little less than $US 700) – but to add insult to injury, the player has even more lawsuits in mind:
The gamer surnamed Zhang discovered six virtual items, worth more than RMB1,500, missing from his game account on November 22, 2006 and contacted Shanda regarding the disappearance. Shanda said that the company had taken the items in accordance with a police investigation regarding the sale of stolen virtual items. According to the report, Shanda failed to follow police instruction and return the items after the investigation ended. Having spent much time away from the game, Zhang said he plans to take Shanda back to court. This time he plans to sue for the RMB150,000 he claims to have spent in the game during the past five years. Zhang sued Shanda in the Hunan Qiyang People’s Court.
Over $US 20,000 seems excessive, to say the least. Will it fly in a Chinese courtroom? I guess we’ll find out.
Shanda Pays For Stealing Gamer’s Toys [Pacific Epoch via PlayNoEvil]
While the virtual asset/microtransaction/free-to-play models are met with suspicion and derision in some quarters, Free To Play has an interesting analysis up of the challenges facing more traditional channels in the face of declining profit margins and an up-and-coming generation of gamers raised on the Club Penguin and MapleStorys of the world. “North American game companies are taking the same “partner and acquire” approach that they’ve used to achieve growth and purchase innovation for the last two decades,” a model that doesn’t work when dealing with some of the Asian companies have theoretical purchase prices that are astronomical.
Shanda is one of China’s biggest game operators and while they’ve been doing well recently (really, really well), they didn’t hit their stride for a few years. Chen Tianqiao, former real estate executive and co-founder of Shanda, talked with the Wall Street Journal about what it took to get Shanda off the ground and turn it into one of the dominant companies in the Chinese gaming market (we’ll ignore the lawsuits regarding copyright infringement):
