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In 2008 the Chinese Online Gaming Industry is Predicted to Be Worth 14.2 Billion RMB Yuan

Posted on: Friday, 13 January 2006, 00:00 CST

Research and Markets (http://www.researchandmarkets.com/reports/c30550 ) has announced the addition of China Online Gaming Industry Development 2005 to their offering.

Since 2003, the Chinese online gaming market has entered a period of rapid development; the online gaming market has been expanding at a high rate. In 2002, the Chinese online gaming market volume was almost 1 billion RMB Yuan. While reached 1.9 billion RMB Yuan and 3.6 billion RMB Yuan in 2003 and 2004, respectively.

However, we are not optimistic about the domestic online gaming companies' operation status. In 2004, The Chinese online gaming industry faced capital integration. Strong companies became stronger and weak companies became weaker. With the development and capital integration of the Chinese online gaming market, several strong companies become the major operators of online gaming industry. Some online gaming companies will transfer their roles to industrial chain's upper echelons and become online gaming developers.

As a consulting company that firstly began and devoted to the research of telecommunication data value-added business, We summarizes the overall status of the Chinese online gaming market, the revenues of major domestic online gaming companies and their competition's status in 2004. In doing so we analyze and forecast the current online gaming market development stage, provides references and basis for the online gaming practitioners, for investors to obtain opportunities then studies and analyzes the current bottleneck sectors/channels of the online gaming industrial chain. At the same time, We analyze and forecasts the overall Chinese online gaming market development status in 2005, the revenues of major domestic online gaming companies and the industrial development tendency.

Findings

-- Online gaming market growth rate decreases

In 2004, the Chinese online gaming market scale reached 3.6 billion RMB Yuan, increasing 89.5% compared with the same period of last year. The growth slowed down due to four reasons: the development of users' demand is limited, the products are similar, sales channel management problems cannot be effectively solved, and the market competition is increasingly fierce.

We forecast the Chinese online gaming market scale will reach 5.8 billion RMB Yuan in 2005, increasing 61.1% compared with the same period of last year. Since 2006, the growth rate of online gaming market will decrease and the market will develop stably. By 2008, the market will reach 14.2 billion RMB Yuan.

-- Channel profit margin will be further compressed.

As the traditional channel providers' profit margin decreased and bad debt ratio is high, the sales channel of online gaming operators tends to be flat. Developing new on-line and off-line delivery and circulation channels has become the key for operation success. In 2004, the channel problem became one of the key factors influencing the major online gaming operators revenues and their market performance.

-- Develop new payment approaches

Due to the influence brought by channel management problems, companies need to develop new effective delivery and payment approaches. As the mobile phone terminal has become more and more popularized, the user scale is huge. The payment option through mobile phones is convenient and prompt with low costs; the online gaming operators will actively develop toward the mobile network payment channel.

-- Online gaming operators further improve interactive interface

Online gaming operators are at the front end of the industrial chain, and mainly control the interactive interface and channels with users. Therefore, the online gaming operators have notable mirror effects in the industry. With stiffer market competition in the forefront, leading companies choices are to expand business contents and market potential in order to avoid the risk brought by low-tide industry period. To make use of effective tools (which increase user retention and expand the user scale), real-time communication tools have become an important method for the major competitors to further grasp the users interactive interface.

-- The online gaming user market scale expands steadily.

In 2004, the online gaming user market scale reached 24 million, including 12.1 million paid users, accounting for 50.4% of all users. We forecast that in 2005 the Chinese online gaming user market scale will reach 33.2 million, increasing 38.3% compared with the same period of last year. The Chinese online gaming paid user market scale will reach 18 million, increasing 48.76% compared with the same period of last year. By 2008, the Chinese online gaming user market scale will reach 75 million, and the paid user scale will reach 41.45 million, 3.45 times more than in 2004.

-- Current online gaming users' consumption behavior has changed

According to our research, the amount of time users spend playing online games doesn't change much, but the time for playing games begins to spread throughout the day. The places where online games are played have transferred from Internet bars to home. The online gaming user group becomes further divided, and the online gaming users' ages indicate expansion to two opposite sides. More and more women begin to play online games while low-income user scale is decreasing.

-- Multi-platform online gaming will be the next emphasis of growth

We believe that along with gradual improvement of the mobile network data transmission capability, the clarification of business and profiting models and consumers' enhanced recognition, the VAS smart phone market pattern will gradually form. As manufacturers stimulate consumers' application demand, part of the fundamental value-added services (similar to PC platform) will be gradually promoted. Abundant mobile phone software product games will be continuously supplied and the on-line mobile phone game market will enter a period of high-speed development.

Topics Covered

1 Definitions and Research Categories

2 The Chinese Online Gaming' Current Industrial Status

3 The Chinese Online Gaming Market Development Tendency Analysis

4 The Chinese Online Gaming Industrial Channel's Strategic Analysis

5 Manufacturers' Development Status Analysis

Appendix: Data Acquisition Process and Methodology

Graph Index

Table Index

For more information visit http://www.researchandmarkets.com/reports/c30550

Source: Business Wire

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