China ' s Online Games Revenue to Hit $2.67 Billion in 2010

A new Interfax China report presented by Research and Markets reveals that China’s online games market has "entered a boom period." The report, China Online and Mobile Gaming Industry, 2008 – 2010, states that sales from online game operators totaled RMB 10.57 billion ($1.55 billion) in 2007, and that figure is expected to reach RMB 12.67 billion ($1.86 billion) in 2008 and RMB 18.21 billion ($2.67 billion) in 2010.

While a majority of this revenue comes from MMOs, China is seeing the casual games sector become a bigger part of the business. "Web games, due to their ease of play and method of access, have become popular among office workers and are considered to offer great potential for in-game advertising due to the strong purchasing power of its user group. Web game companies are attracting venture capital investment and large Chinese portals such as Baidu have started to explore the Web game market," noted Research and Markets.

On the mobile side, 2007 saw revenues generated by Java and BREW games hit RMB 777 million ($113.3 million). These mobile game sales should "maintain their high growth momentum" and reach RMB 1.29 billion ($188.1 million) in 2008 and RMB 3.16 billion ($460.77 million) in 2010.

Although mobile phones are highly widespread (handset users number almost three times the Internet users), those who actually play games online on their phones is "a very small proportion of handset users." Mobile online gaming generated revenues of just RMB 120 million ($17.5 million) in 2007, but the report states that "2008 is likely to be a turning point for the online mobile game market, in terms of rapid expansion due to the upcoming launch of 3G services in China." Revenues from the online mobile game market in China should nearly triple to RMB 380 million ($55.65 million) in 2008, and further investments in the space are expected between now and 2010.

Part of the growth of online gaming and mobile gaming in China has been fueled by an evolving demographic. The report said that there are an increasing number of female gamers and online gaming has become more widespread, no longer tied to just urban residents in the country.

There are currently around 120 gaming operators running approximately 200 online games in China. Shanda, Giant Interactive, NetEase and The9 are China’s top four online game operators in terms of revenues.