On Strength of Online Gaming, Chinese Market Soars

GameDaily has the word that the Chinese gaming market has grown an astounding 68% over last year, largely on the strength of online transactions. Online gaming is the bread and butter of the Chinese and Korean markets, with free-to-play titles the standard and for-purchase in-game items making up the bulk of business income. "The online segment was up 74 percent over 2005, with online games generating $995 million in revenue ... 'Chinese online game operators introduced free-to-play massively multiplayer games that are, in fact, not at all free, because gamers spend money on virtual items and services in the game. These free-to-play games helped the market size rise beyond expectations in 2006,' commented Lisa Cosmas Hanson, managing partner of Niko Partners. 'In addition, the country added 3.4 million total gamers in 2006 and now boasts 37.5 million gamers, 90% of whom play online games. By 2011 this number is expected to swell to 71.9 million.'"

Comments

Like Gunbound?

[MeanderingMind]

I realize Gunbound isn't an MMORPG, but that's what I'm reminded of.

When it started, you could spend real money to buy the items in the game, or you could play the game and earn gold to buy the items. Some items were real money only, and some were game money only. It seemed fair and was fun.

After a long break, I returned to the game to find it had changed. Rather than being able to permanently buy items, you could "rent" them for a week or some meagre time period at the same price you used to be able to "own" them. If you really wanted to, you could still "own" the items. It only cost about 100 times what it used to.

I may be able to understand the "Person works long hours, doesn't have time to play, spends money to reduce 'grind'" argument, but the Gunbound method of doing things bothers me.

Re:Like Gunbound?

[The Orange Mage]

Yes, like GunBound. And Albatross18 (AKA Super Swing Golf on Wii, but online). And...MapleStory I think? Anyways, it's just another MMO-ish idea with a grind focused on items instead of player level in most cases. Those who pay money get items that make them better than non-payers, etc. etc. However, some like GunBound and Albatross18 actually involve something most MMO players are not familiar with: non-point-and-click gameplay. In GunBound, you have to plain and AIM your shots. In Albatross18, it's a damn good golf game up there with Hot Shots Golf, you've got to have actual skill, which is why I love it. In summary, I hate MMOs because "Time spent/wasted should not equal my ability to play."

Twofo G N A A

[Anonymous Coward]

University of Warwick file sharing faggots.

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Online DRM.

[Anonymous Coward]

"GameDaily has the word that the Chinese gaming market has grown an astounding 68% over last year, largely on the strength of online transactions. Online gaming is the bread and butter of the Chinese and Korean markets, with free-to-play titles the standard and for-purchase in-game items making up the bulk of business income."

Obviously the fact that piracy is harder has nothing to do with it.

Is it because MMO business model beats piracy?

[joeflies]

this model of free gaming but pay (i.e. subscriber-based) content turns the corner of making all the content available on a copyable disk. Thus, although I know personally how crazy the MMO and internet cafes are throughout asia, it seems to me the growth isn't necessarily an upsurgance of interest, but rather a business model that can drive revenue in a heavily pirated environment.

Re:Is it because MMO business model beats piracy?

[derforseti]

In a way this model is actually a clever form of DRM, in that you have all of this entertaining content that can only be accessed within the provided virtual world. Considering an analogy to music, for example, it would be like publishing music that you could only listen to if you plugged yourself into some sort of VR machine.

Anyone surprised?

[Cheezymadman]

Two words for you: Gold. Farms.

Virtual items

[jsse]

Ref: 7.8 RMB ~= 1 US$

Not only online games, messenger (im.qq.com), forums, chatrooms, etc. could generate revenue from their users by virtual items sales/exchange. Be it clothes, sunglasses, necklace, decorations for your small home, pets, etc. that'd just cost 1 RMB or so for each, a user would at least spent 1 RMB, a million gives a million RMBs, and a million is just a typical user base for even a lousy game/forums that few programmers could have been made. All those virtual items in different places look alike, because they're just copying from each others.

What is the incentive to buy virtual items? If you don't, you'd look cheap, look unimportant and unnoticable, not to mention some items could give you the edge among the community.

Re:Virtual items

[Reason58]

What is the incentive to buy virtual items? If you don't, you'd look cheap, look unimportant and unnoticable, not to mention some items could give you the edge among the community.

In a country nearing 1.4 billion people you would have to spend quite a lot to look important and be noticed.

Why do MMORPGs subsidize gold farmers?

[WillAffleckUW]

I mean, the rate they charge to play WoW works out to a massively reduced rate from that of US customers, when you do the exchange rate.

And this is why there is growth ...

Step 4) Take out the competition

[StikyPad]

Let's see.. $995M / (37.5M * 0.9 people) = $29.48 per person.

Not exactly a get rich quick scheme, especially if you've got a subscription to pay.

Re:Step 4) Take out the competition

[Anonymous Coward]

So if I earn a billion dollars by making a $1 profit off a billion people, you're saying I'm not really rich because my per-unit margins are small? So I should understand that if each Chinese person offered to give you $1, you would think it unprofitable to collect?