Chinese online gaming companies leading the world will change the global market

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The spread of piracy has led to the rise of online games in China, the US investor business Daily reported. The rapid growth of China's online gaming situation will bring significant changes to the entire video game market in the world.

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The growth of online games in China has not only brought good luck to several companies, but more importantly it could lead to a major shift in the global video game market.

A report by Niko, a research firm in San Jose, Calif., shows that China's online gaming market earned $2.75 billion last year. The research firm predicts 2013 market revenues will reach $8.9 billion trillion, with a compound growth rate of 26.4%.

"There is still a lot of room for growth in China's gaming market," says Lisa Cosmas Hanson, managing partner at Niko Partners. "As the Internet and broadband become more popular, we find that online gaming is the most attractive application."

China's fast-growing online games have NetEase, swimming and Shanda.

The Grand Network, headquartered in Shanghai, last week said it planned to split the game department--a separate listing of Shanda games. Shanda will do this by imitating Sohu, the latter split-game company, which was successfully listed on Nasdaq in April.

Shanda will release its first-quarter earnings on June 3. Wall Street analysts are expected to profit 74 cents a share, up 32 year-on-year, with sales of 156 million U.S. dollars, up 40% per cent year-on-year.

Shanda is China's largest online gaming company, earning about 500 million dollars in gaming last year. Its most successful games are "legendary 2" and "Legendary World", which are, in the jargon of MMORPGs, large multiplayer online color playing games. This means that tens of millions of people may even be playing the game at the same time.

In China, video games are served as a service, not as much gaming software as in the US is sold in retail stores. The rise of this service model is due to rampant piracy.

Niko's report says video games are a low-cost form of entertainment, with each player spending 52 of dollars a month on average.

Tian Hou, an analyst at Pali Hou Tian, said that Chinese gamers use pre-paid cards to pay an average of 30 to 40 cents an hour. "It's very cheap."

"The most popular game in China is that there are tens of thousands of gamers interacting in the virtual world at the same time," Hansen said, "MMORPGs last year accounted for 77% of online gaming revenue." ”

Shanda's massively multiplayer online game has 5.9 million active pay accounts.

According to the network, NetEase is China's second largest online gaming company, which earned 366 million dollars in gaming last year. Its most eye-catching game is "dream West Tour". But NetEase, which is based in Beijing, recently gained the power to act as the most popular game of blizzard in mainland China. At present, the agent of the game by the Shanghai nine cities, will expire in June.

The Chinese video game model attracts the attention of Western game publishers.

"This is the industry with the fastest growing story," said David Cole, a DFC FDI analyst at San Diego. "This is a paradigm shift, and it has a higher margin than traditional retailing can."

And online gaming can have a longer life cycle, Cole added. Many of the games five years ago are still popular today, and the annual income can reach billions of dollars.

Chinese gaming companies are learning from Korean game companies as an example. South Korea has online gaming companies such as Web Zen, NCsoft and Nexon. But analysts say the game market in Korea is already quite saturated.

The MMORPGs market is not as big in the US market as the market can afford higher costs based on video games, and the piracy problem is less serious. But multi-role control games, especially for Microsoft's Xbox Live, still need to be followed up.

"The perfect online game in China and South Korea can be introduced into the Brazilian and Indian markets," Kohl said, "because of the low cost, there are also serious piracy problems in these countries".

"The business model of Chinese computer network games will be applied to the whole world." "Hansen said.

China's other online gaming companies have the perfect world, Tencent, long Tour network and Jinshan software.

Analysts say the growth of online games could lead to the emergence of new leaders in the video gaming industry.

July 2008 Single Game publishers and Vivendi gaming companies merged into a dynamic view of Blizzard is a sign of change. Vivent Company is the owner of World of Warcraft. World of Warcraft is the largest MMORPG, with over 11.5 million users worldwide.

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