Online gaming in China
This article needs to be updated.(July 2016)
Online gaming in China represents one of the largest and fastest growing Internet business sectors in the world. With 457 million Internet users currently active in the PRC, the country now has the largest online user base in world, of which two-thirds engage in online game play. The average online gamer in China is relatively young (18 to 30 years old), male, and has at least completed a secondary level of education. Demographically the online gaming user base in China is very similar to base of China Internet users, most of whom live in larger cities.
Online games in China fall into two primary categories: MMORPGs and MOCGs, the former have a predilection for persistent online worlds where hundreds to thousands of game players can interact simultaneously; the latter is a generic term for games played competitively online without the existence of a persistent online realm (games as simple as online Ma Jiang and online competitive card games would fall under this category). In 2011, there were over 100 million Chinese MMO gamers.
Official Chinese statistics regarding online gaming state that as of the close of 2006 revenue from China's online gaming industry reached 8 billion RMB or around 1.04 billion US dollars, with earnings reaching around 33 billion RMB or 4.3 billion US dollars. Additionally, while Japanese, American, and South Korean companies have traditionally dominated the market, Chinese developed software now holds a 65% market share on the mainland, with an additional 20 million in revenue generated by users outside of China.
China is the source of some of the largest gaming companies in the world, including Tencent, NetEase and more, and has been increasingly developing and acquiring popular online games throughout the world.
The online gaming market in China grew to $1.6 billion in 2007, and is expected to exceed $3 Billion in 2010. According to another estimate, in 2007, China's online games market was worth about US$970 million, with over 36 million gamers.
QQ Games is one such popular online game. Growth was driven in part by China's most popular online game, Netease's Fantasy Westward Journey, which now has 1.66 million peak concurrent users. Another contributor is Giant's Zhengtu Online, which has 1.52 million peak concurrent users.
China is now the world's largest online gaming market, contributing one-third to the global revenue in this sector in 2009, or 56 percent of the Asia Pacific total.
- 1 Government involvement
- 2 Government programs
- 3 Game companies
- 4 Piracy
- 5 Farming
- 6 Government controls
- 7 See also
- 8 References
- 9 External links
Ministry of Information Industry
The Ministry of Information Industry (MII) of the People's Republic of China (中华人民共和国信息产业部）formed in the late 1990s through the integration of the Ministry of Post and Telecommunications and the Ministry of Electronics Industry. The agency's primary goals include the regulation of Chinese telecommunications and software companies. Listed here are the ministry's stated objectives involving online gaming:
- Study and formulate the state's information industry development strategies, general and specific policies, and overall plans, revitalize the electronics and information products manufacturing, telecommunications and software industries, promote the information economy and society.
- Draw up laws, rules and regulations on electronics and information products manufacturing, telecommunications and software industries, and publish administrative rules and regulations; and supervise the enforcement of laws and administrative rules.
- Work out technical policies, systems and criteria of the electronics and information products manufacturing, telecommunications and software industries, and technical systems and criteria of the radio and television transmission networks; certificate the entry of telecom networking equipment to networks and manage the entry of telecom terminal equipment to networks; direct the supervision and management of electronics and information products quality.
- Propel the research and development of electronics and information products manufacturing, telecommunications and software industries, organize research of major scientific and technological development projects, and digestion, absorption and creation of imported technologies, and promote the industrialization of scientific and technological research results; support the development of native industry.
The ministry is also responsible for a number of initiatives aimed at increasing the number and prominence of natively produced online games. One example of such involvement is the inclusion of online gaming in the 2006–2010 plan for software and information service development.
General Administration of Press and Publication
The General Administration of Press and Publication (GAPP) of the People's Republic of China (中华人民共和国新闻出版总暑) is responsible for monitoring and regulating publication of print based media, electronic media, and audio-visual products (including online games). The ministry has also been instrumental in combating the growing problem of Internet addiction and game addiction in China by teaming up with eight other government outlets concerned with the growing effect of game play on China's youth. The other concerned entities are as follows: Central Civilization Office, Ministry of Education, Chinese Communist Youth League, Ministry of Information Industry, Ministry of Public Security, All China Women's Federation, and China's Care for the Next Generation Work Commission.
The GAPP also initiated the China National Online Game Publication Project in 2004. The intent of the project was to promote native game development through the use of government subsidies to game developers. In its third year, the project is to run through at least 2008, and has provided an estimated 300 million RMB to 16 Chinese game development companies.
State Administration of Radio, Film, and Television
China's State Administration of Radio, Film, and Television (SARFT) (国家广电总局) affected the world of Chinese online games in 2004 by instating a blanket ban on computer game related commercials in the state-run media. The only company to directly contradict this ban is Chinese game provider The9, which teamed with Coca-Cola to jointly promote the release of the popular Western MMORPG World of Warcraft in 2005. Besides this instance, the online game market has thrived without much media promotion.
This section needs to be updated.(November 2010)
Anti-addiction or fatigue system
In 2005, the General Administration of Press and Publication, and seven partnership ministries, including the Ministry of the Information Industry, proposed a solution to the perceived threat of game and internet addiction in the PRC. The idea was to implement an anti-addiction mechanism that would lock players out of a game after a specific time interval. Also referred to as a "fatigue system" the proposed mechanism was a piece of software installed on the computer and compliant with every MMO active in Chinese game space. Developers were requested to alter their games to allow the fatigue program to monitor a user’s playtime, when the player spent more than three hours online in one day the system would then limit their ability to continue playing, either by turning off in-game reward mechanisms or stopping play. The fatigue system would also be paired with a real name ID system, to ensure that individual players could be more easily tracked, and their game play controlled. After the initial announcement there was a large public outcry from both adult gamers (currently at least 50% of China's online gaming demographic), and developers who were left scrambling to find a means of implementing the system into games already being played. These general complaints caused the Chinese government to delay the implementation of the system from 2006 to April 2007; they also restricted its use to only affect players under the age of 18.
The system has a proposed three stage implementation plan stretching from April 15 to July 15, 2007. Stage one began on April 15 and is scheduled to continue until June 15. The intent of this phase is to allow game developers, and publishers to prepare for full scale outlay of the system. Stage two is proposed to begin immediately after stage one and continue until July 15. This month is to allow game companies adequate time to test and debug their system implementation. The third "phase", beginning after July 15 will signify the final roll out of the system, and its integration into live game servers; essentially the third phase is the proposed release date for full implementation.
The 10 largest online game companies by revenue in 2017:
- 37 Interactive
- Perfect World
- Alpha Group
- Century Huatong Group (owner of Shanda)
- Kunlun Tech
In order to gauge the popularity of online games, both in China and internationally, three benchmarks are commonly implemented. The first is peak concurrent users (PCU), which is the maximum numbers of players online simultaneously at a given time. A high PCU number signifies that a game has a large base of constant user participation, which is essential for the survival of an online world. The second statistic used is the daily active player base; this number is essentially a count of the number of disparate users who sign on in a given 24-hour period. This statistic differs from PCU simply because of its longer time span but the daily user base is still a good quantifier of popularity and usage.
The third statistic is simply the total number of registered users for a specific game or service, this statistic is significantly more problematic because most, if not all, online games do not limit the user to a single account or user name. For example, some games claim millions of registered users; a disingenuous statistic given that the most popular MMORPGs in China usually garner only 800,000 to one million peak concurrent users. Thus, while registered user numbers can be quite impressive, they are not as accurate a gauge of popularity as the other aforementioned statistics.[original research?]
In 2010, there were 25 investments made into Chinese online gaming companies. Of the 25 investments 20 of these deal disclosed financial details. As a group these 20 deals combined for a total of $137 million USD in investment.
Tencent Games is the Interactive Entertainment Division (aka IED) of Tencent.
Shanda Interactive Entertainment
Shanda produces and supports many popular MMORPGs. The company is significant because it introduced a new online payment system with the release of Legend of Mir 2 in 2001. Instead of charging users for the initial purchase of the game, Shanda gave the software away free-of-charge and decided to charge users for time spent playing in game. This payment system specifically counteracted piracy because the company could maintain easier control over the time users spent in the game, rather than attempt to limit the game’s distribution.
Shanda maintains a large number of MMORPGs in China developed by Western, Korean and native Chinese companies; the latter two regions produce Shanda’s most popular games. The company also maintains numerous casual games as well, with platforms supporting chess and other non-persistent world games.
Netease, a popular online portal in China, also branched out in the space of MMORPGs with the release of Westward Journey. The game, based on ancient westward travels on the Silk Road (a popular theme from Chinese developed MMORPGs), has gone through two iterations; it was re-released as Westward Journey II due to numerous problems with the initial release, and its game engine was used to develop Fantasy Westward Journey, which is currently the most popular MMORPG in China (based on PCU numbers).
The9 (第九城市) is similar to Shanda Entertainment, it specifically maintains and produces MMORPG content for the Chinese gamer base. The9 is notable because of its partnership with Blizzard Entertainment in bringing World of Warcraft (the most popular MMORPG outside of Asia) to China. World of Warcraft is the most popular western MMORPG in Asia, and one of the most popular in China in general. Recent statistics place its peak concurrent users at around 688,000, easily among the top MMORPGs in the country. The9 also implemented a pay-for-time system for the game, which differs from the monthly subscription payment structure used by Blizzard in other territories.
In April 2009, World of Warcraft owner Activision Blizzard announced it had selected The9 competitor NetEase to operate the game in China. The9's license expired on June 7, 2009.
Because of the high amount of software piracy in China, many foreign game companies have been reluctant to enter the country's market with single player or console games. Instead, they have focused on selling online titles such as massively multiplayer online games as income from these titles comes largely from subscription fees or in game item purchases rather than the purchase price of the title itself.
As of December 2005, there were an estimated 100,000 Chinese employed as "farmers", video game players who work to acquire virtual currency or items in online games so they can be sold to other players for real currency.
The Beijing Reformatory for Juvenile Delinquents claimed in 2007 that a third of its detainees were influenced by violent online games or erotic websites when committing crimes such as robbery and rape. In a high-profile case from October 2004, 41-year-old Qiu Chengwei was sentenced to death for murdering 26-year-old Zhu Caoyuan over a dispute regarding the sale of a virtual weapon the two had jointly won in the game Legend of Mir 3. Also, in September 2007, a Chinese man in Guangzhou died after playing Internet video games for three consecutive days in an Internet cafe.
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- Telecommunications industry in China
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