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

Just got the save the date for this year’s Nite to Unite for Kids that the ESA puts on every year. It’s one of the best charity events in the games industry. This year it will be on October 20th at the Westin St. Francis in San Francisco, beginning at 5:30 PM. Tickets are usually $500 per head and tables run $5,000, $10,000 and $20,000 depending on the level of charity to which you want to commit.

If you’re interested in booking a table or buying a seat, contact Jenny Lai at The ESA (jenny at theesa dot com).

Games Convention Online is interested in having speakers give lectures on Business & Legal (e.g. business models; micropayments; start-up & Investment topics; data security), Development (e.g. game design; programming & production; open source), Browser GamesClient-based GamesMobile GamesSocial Games (e.g. connection to browser games) and Internationalization (e.g. localization, international networks, community management).

GCO takes place July 8-11, 2010 in Leipzig, Germany. You can submit a speaker proposal here.

According to an article in Adweek, the value of a Facebook fan is $3.60. Vitrue, a social media specialist agency determined that a fan base of 1 million is equal to $3.6 million in equivalent media over a year.

Vitrue analyzed Facebook data from its clients – and found that marketers posting twice daily can expect ~60 million impressions per month through their news feed (not uniques).

With a $5 CPM, 1 million fans generate about $300,000 in media value each month.

The Florida House of Representatives voted unanimously to begin offering a 15% tax credit for “qualified productions” in the state.  The credit is on in-state spending for all games. An additional 5% credit is available for spending that occurs “off season” (June – November) and for “family-friendly” titles.

New research from The Diffusion Group (TDG) finds that one-third of U.S. broadband households now use a game console that is connected to the Internet:

  • 78% of PS3s are online
  • 73%of Xbox 360s are online
  • 54% of Wiis are online

IE Sherpa Opinion: Data isn’t available on the ARPPU from digital purchases on any of the platforms, however having purchased from each of the systems, XBLA and PSN are very similar in how easy it is to transact. My preference would actually be PSN since you don’t have to purchase points that tend to result in small unused balances in your account. This is the easiest for consumers with a credit card. The Wii is the most difficult to navigate and given the audience should be the easiest to purchase on, but it isn’t.