The bubble era of Chinese online games will end

Absrtact: May 4 News, according to foreign media reports, the Chinese online games market bubble era is expected to end, investors on the Chinese online games shares enthusiasm has also cooled. Chinese gaming companies listed in the US have been facing tougher industry regulation and new games this year

May 4 News, according to foreign media reports, the Chinese games market bubble era is expected to end, investors on the Chinese online games shares enthusiasm has also cooled. This year, Chinese gaming companies listed in the U.S. have been facing tougher industry regulation and slow development of new games.

Two of China's largest online gaming operators have fared the worst: Shanda's shares have fallen 14% this year, and the perfect time has fallen 13.6%. Meanwhile, NetEase's shares fell more than 9% per cent, while the shares fell by 2% per cent in a disappointing quarterly performance report.

"The plight of the Chinese online gaming market has been caused by a number of reasons, which also gives investors a wait-and-see attitude to the market," said Adam Krejcik, an analyst at the US investment bank, Roth Capital. "Market competition is a common concern, and it is becoming increasingly difficult to launch successful new games," said Adam Krejcik. ”

ThinkEquity analyst Atul Bagga pointed out that the huge growth in the Chinese online gaming market led to the formation of bubbles. "In the past few years, China's online gaming market has grown at a 60–70% rate, while the more normal growth rate should remain 20–30%," he said. ”

The analysis that swims is a typical example. The first quarter of this year's revenue of 72.1 million U.S. dollars, an increase of 17%. It looks good, but it's the second worst quarter ever. In the past 8 quarters, the growth rate of the tour is 1151%,330%,144%,50%,39%,26%,21%, then this is the 17%. With the expansion of the company's size, it is increasingly difficult to maintain a strong growth rate.

The portal Sohu Holdings 68.5%, a tour of almost all income from a "Tianlong eight" game. Last quarter, the launch of "Tianlong Eight" game new information, to provide better graphics and content. The move spurred sales growth, but the lack of an important new game remains a problem.

The company's first-quarter users reached 1.04 million, an increase of 7% per cent, a tour said. But a year ago, the user growth rate of the tour reached 47%.