Huge online gaming growth predicted - despite warning of need for new growth areas

Includes: NTES, SINA, SNDA
by: Ezra Marbach

According to an IDC report, China's online gaming market is expected to
see an annual compound growth rate of 34.7% until 2009. Here are some gaming and telecom statistics, and a new virtual business the could spur the Chinese online auction market:

Highlights of the IDC research note:

  • Government figures show that China's online gaming market generated revenue of $298.7 million in 2004, up 34.7% over the previous year.
  • Telecom operators, who provide Internet access services to game players, booked revenue of $1.8 billion from the online gaming business.

Among the top 10 most popular online games last year:

  • Shanda Interactive (ticker: SNDA) claimed the #1 and #3 spots.
  • (ticker: NTES) saw three of its games in the top 10.
  • (ticker: SINA) also placed in the top 10.

New gaming-related business:

  • Cyber-products, goods only existing in online games such as armor and weapons, are becoming a new source of revenue.
  • Approximately 20% of game players spent an average of $85 per capita last year buying cyber-products.


  • IDC warned that there were no exciting games
    launched last year.
  • Game operators and developers need to find new sources of growth.