Industry competition intensifies China's online gaming industry is about to enter the era of mergers and acquisitions

Ma recently said Tencent plans to add 1000 more employees to cope with the company's growing online gaming business this year. Industry personage analysis, Tencent move is in order to match oneself in the net swims the purchase behavior of the industry. Earlier, Ma said Tencent would buy Asian online game developers and operators. At the same time, the giant network also expressed its intention to buy. The competition of the online games industry makes the operators of small and medium sized games face more and more operation pressure, which provides the possibility for the leading operators ' merger behavior. 　 China's online gaming industry is about to enter the era of mergers and acquisitions. The fierce competition in the online games industry is accompanied by the risk capital and the IPO trend, the recent two years of rapid influx of funds in the online games industry, the rapid expansion of the scale of online games. 　The concentration of the online gaming industry is falling due to the number of competitors – research data show that the top 3 operators ' share of income in the industry fell from 71.9% in 2005 to 45.7% in 2007. Reporter learned that at present, China's market on the online game products have more than 300. With the new online games products continue to emerge, while the old online products rely on the release of new information and not quit, the market on the number of online games will be more and more. 　Because of the main revenue of the online games listed companies are still mainly from one or two of the mainstream online products, therefore, the profit margins of our online games industry will face a certain pressure. In addition, there are many worries behind the rapid growth of Chinese online games industry. As competition intensifies, the online gaming industry has become a high investment and high-risk industry, according to an Internet analyst at CCW Consulting. Only through the listing of enterprises to raise funds, it is possible in the future competition to obtain more resources to deal with the strong pressure from competitors. "Online games is a quick money, loss of money is also fast industry, the market environment changes too much." Now, the risk of new VC investment is also very big. 　"One of SoftBank's investors has shown concern about investing in online games. Goldman Sachs is also cautious about the overall development prospects of China's online gaming industry. China's online gaming industry is fast becoming saturated, with most games lacking innovative content and hard to attract a large number of players, according to a report published recently. In addition, the Olympic Games may have a negative impact on the games industry, because during the Olympic Games, people are more inclined to watch sports on TV. 　Therefore, China's online gaming industry will face some pressure in the future. Independent research and development faced with high cost, homogeneity and other issues of the international statistical data show that, from the margin level, the pursuit of independent research and development of the operators of the net profit is very high. such as the net Dragon's gross margin is even up to 91%, while the main agent operating nine cities only for 45%. 　In addition, the independent research and development of the giant network to 68% operating profit margin to become the most profitable online operators one. As a result of independent research and development can get higher profits, more and more online operators will focus on independent research and development. China Publishing Workers Association game Publications Working Committee and IDC jointly published the "2007 China Game Industry Survey Report", 2007Year, the new input to the Chinese online games market survey of online games products Total 76, of which China's independent research and development of the net to 53, accounting for the new public network game 69.7%. 　2007, engaged in independent research and development of enterprises up to 126, compared to 2006 increased by 33, an increase of 35.5%. With the study of fever and the rapid increase in the cost of research and development, in the past, a game development costs within 20 million yuan, the number of users only to reach 20,000 can recover costs, game operators to achieve survival is relatively easy. But the core operators continue to go public, they have a strong financial strength, development team and user base, the initial formation of the market pattern, the number of games and varieties are also increasing, the user selection range also increased, the development of large-scale games increased risk, the industry threshold gradually elevated. 　Shi Yuzhu asserted that no 100 million yuan of funds do not touch online games. Compared with the huge capital investment, the extreme lack of game talent is a real headache for many game operators. Analysys International Research report shows that 2007 national game talent Gap of up to 600,000, in 2008 this gap will continue to expand to 1 million. 　The scarcity of talents directly leads to the current trend of the homogenization of some online games, and in some large companies, the research and development of the online game is almost reduced to production line, and the so-called innovation also stay on the surface, lack of real change. Online gaming industry is about to enter the era of mergers and acquisitions although independent research and development faced with high cost and homogeneity of the problem, but for a high number of online games, if the game operators can control the Plug and other technical issues, and often update the game content, then the player will not easily leave this game, In this way the life cycle of the game can often be extended, thus contributing more revenue to the operators. and have independent research and development strength of the network game operators in the control of the game content updates, governance technology issues such as clearly more flexible, more advantages. 　Therefore, a forward-looking vision of the online operators will still insist on independent research and development. And the 2007-year listing spree has enabled online operators to have a lot of cash and strong enough to support their acquisitions of other companies. Online games industry is still a very creative culture and entertainment industry, so how to mobilize a good game creative people to serve their own network game operators always have to consider the issue, and the acquisition of creative team is undoubtedly a good solution. 　At the same time, strong independent research and development strength of the game to continue to generate income has an important impact. From the current investment environment of the online gaming industry, the fierce competition environment will make small studios more sober, they will be more rational assessment of their value, which will improve the investment environment of the industry. 　Although the online gaming industry 2007 years of market size reached 11.7 billion yuan, but not all online gaming companies can be profitable in this process. The frequent acquisition by the internet giants will accelerate the division of the industry, and the network giant is going to accumulate more and more resources and ultimately control the industry's dominance through acquisitions. For this trend, Shenzhen Internet technologyZhou, executive vice president of the Operation and Application association, said that the acquisition trend of the online games industry giants would aggravate the industry differentiation, and the trend of industry competition would be more obvious. Zhou analysis, said that the game industry has an obvious feature is that the first and second turnover gap is very far, the network giant will accelerate the division of frequent acquisitions, the network giant would accumulate more and more resources through acquisition and ultimately control the industry's dominant power. 　In the competition situation, the small game trader faces the situation to be more and more serious. In response to this situation, Zhou suggested that small online gaming companies can also choose a "small union" that is, the emerging network game developers and operators between the merger, or small and medium-sized enterprises, rather than by large online games manufacturers to buy. "The advantage of this is that SMEs can be combined to form their own voice in the industry in particular the right to price, to avoid vicious competition." "Zhou said.