Chinese Online Games to Top $3 bln in 2010

Pearl Research has published a new study that estimates that the Chinese online games market will exceed $3 billion in 2010.

The Chinese online games market grew over 60 percent to $1.66 billion in 2007, according to Pearl’s 130-page Games Market in China study.

Pearl’s Allison Luong said that growth will be driven “by compelling and diverse content, free-to-play games, and rising demand for leisure and technology products.

“Chinese-themed and advanced casual games are expected to drive revenues in 2008 and beyond.”

She added, “A key trend to track in 2008 is rising average-revenue-per-user (ARPU). Certain online games are reaching $7 to $12 a month in average-revenue-per-user, significantly higher than past averages of $5 or less per month. I believe there is still room for average-revenue-per-user to grow, as game operators enhance monetization efforts from free-to-play games”

Key findings as provided by Pearl Research state:

China’s most popular online game, Netease’s “Fantasy Westward Journey” has 1.66 million peak concurrent users, followed by Giant’s “Zhengtu Online” with 1.52 million peak concurrent users. Successful MMORPGs can be highly profitable. Game operator Giant Interactive generated the majority of its $209 million revenues from one title, “Zhengtu Online.”

Game operators in China experienced strong revenue growth in 2007. The biggest gainers were game operators Shanda (up 49% to $338 million), Giant (up 274% to $209 million), The9 (up 30% to $175 million) and Perfect World (up 593% to $95 million). Coinciding with this revenue growth was a wave of initial public offerings (IPOs) by game operators Giant, Perfect World, NetDragon and KingSoft.

The study also contains highlights from Pearl Research’s Phoenix Generation research initiative, consisting of more than 200 one-on-one, personalized interviews conducted with Chinese youth. One key finding is that games are a social phenomenon, with gamers often playing casual games to connect with friends and flirt with others. Gamers cite cheating and account thefts as a top reason for abandoning a game and seek out game operators with a reliable reputation.

Published by Reinout te Brake

Reinout is a games investor and strategic business consultant specializing in the games industry. Reinout established his credentials through his own successful investments, start-ups, consulting and (advisory) board positions that led through time to strong bonds with key stakeholders in this fast paced industry. He is known for his outstanding results in the gaming industry. He has worked with many game studios around the globe and is therefore well known in the international gaming industry. Check out his games podcast;

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