Chinese Gaming Market to Reach $2.1B In 2010

GameDailyBiz is reporting on a study indicating the Chinese gaming market is likely to hit $2.1 Billion in 2010. From the article: "While much of this growth has been and will continue to be fueled by the popularity of MMORPGs, Niko points to another trend: the rise of casual games. Niko believes that premium casual games will reach MMORPG-like popularity over the next few years and will achieve 40 percent of all online revenue by 2010. 'Chinese gamers' passion for massively multiplayer online role-playing games (MMORPGs) has extended to the casual and premium casual segments,' said Lisa Cosmas Hanson, managing partner of Niko Partners. 'Premium casual games provide new gamers greater access to the online game market and open up an alternate source of entertainment for hardcore gamers.'"

Comments

2.1 Billion Dollars?

[AKAImBatman]

Really? That's not very much. When you consider that China has a mainland population of 1.3 billion (compared to the US's 300 million), $2.1 billion dollars pales in comparison to the $6 billion dollar industry that the US has become. Or to put that into ratios:

China - 63:39
States - 780:39

I'd say that China still has a long way to go when it comes to developing a game industry. Sure, the hard cash number of $2.1 billion does sound impressive, but that does have to be balanaced against the amount of money that must be spent to reach that level of market penetration. If the gaming public is spread across China (and not centered in a specific area like Shanghai), the costs of reaching that market could well whittle away those profits. Greater market penetration might result in much higher returns.

MMMORG are great for publishers

[the_humeister]

Especially for a market as large as China with such rampant piracy. The revenue stream keeps coming as long as the content is interesting and worthwhile. As for pirating a copy, well that doesn't matter because you can't play if you don't pay the monthly fee.

Re:Cultural change in game

[ClamIAm]

Right now most games are developed by western countries

Um, you can't be serious. Japan and Korea produce tons of games.

Further reading...

[The-Bus]

There's some further reading at U.S. News & World Report's site, which has an issue detailing more about shoppers in China and India. From the issue:

When they talk about China and India, western business executives can't stop using the word "scale." Take the experience of Blizzard Entertainment, based in Irvine, Calif. It took a year to attract a million paying subscribers in North America for World of Warcraft, its popular online video game; in one month, the company signed up 1.5 million for the Chinese version of the game. How about cellphones? There are 400 million cellphone users in China, and, on average, they replace their phones every three to six months. Consumers in China can choose from something like 900 different models, compared with only 80 or so in the United States. Companies like Samsung offer a new handset model in China as often as once a week.

Those statistics, if correct, boggle my mind.

The Subscription Model is necessary

[ObligatoryUserName]

China is a good example of what happens to media production when piracy is rampant, the only content professionally created is content that the developer is guaranteed to be paid for. In the early 2000's (can't remember the year) I met a representative of a Chinese game company at the GDC. He said that their only hope for staying solvent was to find a US publisher to bring their games to the States because there was no money to be made in China under the traditional game development model. I beleive EA has said publicly that the only reason they release anything in the region (excluding Japan of course) is to "prime the market" for the day when piracy is no longer a problem there - build up the franchises now with subsidies from their successul regions because they were actually losing money with every title they shipped. Casual pirates should look to China to see what the logical end-result of their actions are: no money for new content development.

Much cheaper to play

[Nazmun]

Wow subscriptions are closer to $2 usd there versus $15 here.