Niko Partners, the leading market intelligence firm on China’s video game industry, today reiterated the vibrancy of China’s video game industry, based on findings from its newly published 2010 Chinese Video Game industry Annual Review & Five-Year Forecast report.

“Niko forecasts that by the end of this year 93 million Chinese gamers will play a mix of PC online, offline, console and handheld games, yet only the online segment generates legitimate revenue,” said Lisa Cosmas Hanson, managing partner of Niko Partners.

• Niko’s recently forecasted online games revenue in 2010 at $4.52 billion
• There is strong demand for digitally downloaded PC offline games as well as consoles and handhelds, in spite of piracy and the regulation that bans consoles
• Niko calculated that total Chinese game software and services revenue, including PC offline, console, handheld, and (primarily) online games, reached $4.61 billion in 2009, up 28 percent from 2008
• Chinese consumers are entering the online game market at a rapid pace thanks to casual games such as social networking service (SNS) games and other growth drivers.
• China’s 165,000 Internet cafés are used for social entertainment and competition as home PC penetration rises and gamers spend more time gaming at home.
• Chinese console gamers have eschewed previous generation consoles in favor of the Xbox 360, Wii and PlayStation 3.
• The regulatory landscape continues to be burdensome for game companies.
• China could have 100 million new gamers over the next 2-3 years, driven by social networking games, MMOs and casual games.
• Chinese gamers prefer the Free-to-Play (F2P) model of online games in which online operators generate revenue via the virtual economy, rather than the time-based model in which access is provided for a fixed number of pre-paid hours.
• 63% of gamers surveyed increased their spending on online games in the past year.
• Social Networking Sites (SNS) games have gained popularity among Chinese consumers, and 88% of the gamers Niko surveyed claim to play SNS games.
• The primary reasons gamers with PCs at home go to an Internet café are to be social with their friends and to participate in gaming competitions.
• At least 65% of gamers use Internet cafés at least part of the time.
• There were 68 million online gamers in China by our definition at the end of 2009 and by 2014 the number should reach 141 million, a 15.5% CAGR.

The 2010 Annual Review & Forecast report is available now for $8,000, and a subset version focused on online games, the 2010 Chinese Online Games Market Review & Forecast report, is available for $5,000. To purchase, contact: info@nikopartners.com

DisplaySearch (an NPD company) announced the findings of its Quarterly TV Design and Features Report. The firm estimates that:

• 3D TVs will grow from 0.2 million units in 2009 to
• 1.2 million units in 2010
• 15.6 million units in 2013
• 64 million units in 2018

Figure 1: DisplaySearch 3D TV Set Forecast

Source: DisplaySearch Quarterly TV Design and Features Report

DisplaySearch forecasts that over 70 million connected TVs will be shipped in 2012—up from around 15 million in 2009.

Figure 2: DisplaySearch Connected TV Forecast

Source: DisplaySearch Quarterly TV Design and Features Report

According to a release from IDC, there were more than 450 million mobile Internet users worldwide in 2009, a number that is expected to more than double by the end of 2013. Here are the highlights from IDC’s Worldwide Digital Marketplace Model and Forecast”:

• More than 1.6 billion people – a little over a quarter of the world’s population – used the Internet in 2009
• By 2013, over 2.2 billion people – more than one third of the world’s population – is expected to be using the Internet
• More than 1.6 billion devices worldwide were used to access the Internet in 2009, including PCs, mobile phones, and online videogame consoles
• By 2013, the total number of devices accessing the Internet will increase to more than 2.7 billion
• China continues to have more Internet users than any other country, with 359 million in 2009
• The number of Internet users in China is expected to grow to 566 million by 2013
• The United States had 261 million Internet users in 2009, a figure that will reach 280 million in 2013. India will have one of the fastest growing Internet populations, growing almost two-fold between 2009 and 2013.
• The United States has far more total devices connected to the Internet than any other country
• China is the leader in in the number of mobile online devices with almost 85 million mobile devices connected to the Internet in 2009
• The number of Internet devices in India, both mobile and fixed, is expected to grow commensurate with the number of Internet users
• Worldwide, more than 624 million Internet users will make online purchases in 2009, totaling nearly $8 trillion (both business to business and business to consumer)
• By 2013, worldwide eCommerce transactions will be worth more than $16 trillion
• Worldwide spending on Internet advertising will total nearly $61 billion in 2009, which is slightly more than 10% of all ad spending across all media
• Worldwide spending on Internet advertising is expected to reach almost 15% of all ad spending across all media by 2013 as Internet ad spending grows surpasses $100 billion worldwide

According to eMarketer, there will be 126.2 Million Mobile Internet Users by 2013. This presents great opportunities for social gaming companies and mobile entertainment companies as it becomes easier to have cross-platform access to entertainment. It also means there will need to be a greater push for mobile browser sized web pages and applications.

eMarketer’s article also cites Yankee Group’s projection that:

• Smartphone application revenues will reach $4.2 billion in 2013
• Smartphone application revenues are estimated at $343 million in 2009

According to eMarketer, the U.S. Mobile phone Market will reach 255.4 Million people by 2013. This represents 80% of the population.

The Associated Press ran a story today quoting GigaOM Pro Analyst Alfred Poor predicting:

• An install base of up to 46 Million 3D Televisions by 2013
• 2.6 Million 3D TV sales in 2010
• U.S. home video revenues in the first half of 2009 fell 3.9 percent from a year ago to $9.4 billion

This is very positive for 3D gaming as it emerges in 2010-2011 as a feature consumers will want and expect.

Electronic House is citing GigaOm as a source stating that there will be 46 Million 3D televisions shipped in 2013.

While this isn’t mainstream acceptance of the platform, it is still significant, especially when establishing a consumer base for 3D games.

PricewaterhouseCoopers came out with updated estimates on the size of the retail