A San Jose-based Niko Partners, the market intelligence firm on China’s video game industry, announced preliminary results from its upcoming Annual Review & Five-Year Forecast on China’s video game industry, citing $3.57 billion in revenue from online games in 2009. The annual review and forecast on online gaming and Chinese gamers shows strong growth by Chinese online game operators, despite a harsh regulatory environment particularly for foreign games, and a gamer base that has become increasingly discerning about game quality. Niko had forecasted 2009 revenue to reach $3.65 billion. For 2010, the firm predicts that the online game market will reach $4.5 billion and enjoy a healthy CAGR of 20.9% over the next five years with revenue reaching $9.2 billion in 2014.
Key insights from the report:
? 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 caf? are to be social with their friends and to participate in gaming competitions.
? At least 65% of gamers use Internet caf?s 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.