Niko Partners, a leading research firm focused on providing market intelligence about the Chinese video game industry, recently released data from their upcoming study, projecting $9.2 billion in revenue from online games in China in 2014. This study falls right in line with their 2013 projections, which place the market at a valuation of $8.9 billion.
According to the report, the vast majority of revenue generated in the Chinese online gaming market is derived from sales of virtual goods in free-to-play titles. To put this growth in perspective, Niko currently estimates the 2009 market to generate around $3.57 billion. Their 2010 prediction indicates a 21 percent growth to $4.5 billion.
The report also references a survey conducted by Niko of Chinese gamers. Conducted in 10 various major Chinese cities, the survey reveals that 65 percent of gamers in China access games from Internet cafes (still), and that their spending increased a whopping 63 percent in the past year. While most gamers do own their own PC’s, they indicated that the “gaming café” culture is still alive and well, as most Chinese gamers prefer to café game because of the social interaction.
“While the global economic downturn hurt video game publishers in much of the world, China’s online game industry reflected no pain in 2009 and gamers continued to embrace online games as the best inexpensive source of social entertainment available,” said Lisa Cosmas Hanson, managing partner of Niko Partners. “While the era of online gaming is generating lots of interest and growth opportunity in the West, China is one of the countries where online gaming is a well established market segment that extends its reach to more and more Chinese consumers every year.”
Other figures of note from Niko’s release:
- 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.
- Social Networking Sites (SNS) games have gained popularity among Chinese consumers, and 88% of the gamers Niko surveyed claim to play SNS games.
- 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.
Niko Partners Managing Partner Lisa Cosmas Hanson comments, “There’s no doubt that the market for games is growing at an incredible rate in China. The economics of the market are shifting from supply-driven to demand-driven.”
