Games market in China booms despite piracy

The videogames market in China is experiencing a period of rapid growth and will continue to do so over the next few years, with the number of players set to reach 55.5 million by 2009.

That's according to a new study by market research firm Niko Partners, who conducted hundreds of interviews across ten Chinese cities to build the review and forecast of the market, published today.

At present there are 28.8 million gamers in China, a number that will rise to 55.5 million by 2009. Half of all gameplay takes place in the country's 350,000 Internet cafes, and online gaming is growing increasingly popular. The study forecasts a compound annual growth rate for the online games market of 33.8%, which will see revenue soar from $467.8 million in 2004 to $2 billion in 2009.

"Online games are emerging as the preferred platform for gamers and publishers," said Niko executive Lisa Cosmas Hanson. "The online game platform is an excellent solution for the Chinese market, meeting the consumer demands for social interaction, entertainment, and intellectual stimulation.

"It also meets the needs of publishers because revenue is earned from fees gamers pay to play games, rather than from purchases of game software units that have long been the victim of piracy in China."

However, the survey also observed that entering the Chinese market can still be a challenge for foreign companies. Although the Government welcomes international investment, regulations governing the games industry are complicated.

"Foreign videogame companies need to adapt their business models to make them appropriate for the demand of the Chinese market and the restrictions on content by the Chinese government," said Hanson.

The survey, entitled The 2005 China PC, Console and Online Video Games Market Study, provides a review and forecast of the Chinese market for the period 2004-09. Niko conducted 366 interviews in ten cities across China, talking to retailers, developers, publishers, industry executives, online game operators and Internet cafe managers.