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Study: Online Games Industry Sees 'Explosive Growth' In China

Study: Online Games Industry Sees 'Explosive Growth' In China

May 5, 2011 | By Mike Rose

A report by video game market intelligence firm Niko Partners has found that the online games industry in China is outperforming the country's national economic growth.

Based on gamer surveys across 10 cities in China, the research firm found that online and -- in particular -- social games have seen "explosive growth."

Games on social networking sites first appeared in China in 2009, generating $80 million in revenues. In 2010, the amount of revenue brought in from these social games reached $500 million.

The report also noted that social games were played less in internet cafes in 2010, with most being played at home or on office computers. This was confirmed with sampling via 20,000 internet cafe PCs across China.

Going into 2011, Niko Partners estimated that the growth-rate for revenues from online and social gaming will be 21.4 percent this year, compared to The World Bank's projection of a 9.3 percent growth rate for China's gross domestic product in 2011. The firmed noted that this shows "significant strength within that particular sector of the Chinese economy."

The firm also estimated market size for the game industry in China as $5.8 billion for 2011, compared to $4.8 billion last year.

Lisa Cosmas Hanson, Niko Partners' managing partner, noted, "Chinese game companies are looking for even more growth beyond their borders, and they have more experience operating online games and social games than anyone else in the world."

However, the firm warned that game companies in China need to be ready for competition from non-traditional game companies domestically, and global game industry giants both abroad and in China.

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