Online Gaming In China To Reach $3 Billion

    March 20, 2008

The online games market in China is on track to surpass $3 billion in 2010 up from $1.66 billion in 2007, according to Pearl Research.

World of Warcraft China LogoWorld of Warcraft China Logo
(Photo Credit: WoWChina)

Allison Luong, Managing Director of Pearl Research said, "The year 2007 exceeded expectations with the market growing more than 60%, driven by compelling and diverse content, free-to-play games, and rising demand for leisure and technology products. Chinese-themed and advanced casual games are expected to drive revenues in 2008 and beyond."

China’s most popular online game, Netease’s "Fantasy Westward Journey" has 1.66 million users followed by Giant’s "Zhengtu Online" with 1.52 million users. Game operator Giant Interactive generated the majority of its $209 million revenues from one title, "Zhengtu Online."

Game operators in China had solid revenue growth in 2007. The biggest gainers were game operators Shanda (up 49 % to $388 million), Giant (up 274% to $209 million), The9 (up 30% to $175 million) and Perfect World (up 593% to $95 million). Along with the revenue growth was a number of initial public offerings (IPOs) by game operators Giant, Perfect World, NetDragon and KingSoft.

"A key trend to track in 2008 is rising average-revenue-per-user (ARPU). Certain online games are reaching $7 to $12 a month in average-revenue-per-user, significantly higher than past averages of $5 or less per month," said Luong.

"I believe there is still room for average-revenue-per-user to grow, as game operators enhance monetization efforts from free-to-play games."