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