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China Online Game Industry Report, 2005-2006

Published: Sep/2006

Hard Copy  USD $ 1,400
Pages: 115 Electronic(PDF)  USD $ 1,500
Report Code: Enterprisewide  USD $ 2,250
 

Ourgame.com formally came into operation in June, 1998. Chinese network bubble started to burst since 2000. Many network companies consequently had to cut staffs or had been closed down. However, in May 2001, with 20 million subscribers and 170,000 users online simultaneously, ourgame.com became the world’s largest online game website. The good performance of online game websites led by ourgame.com and MUD indicates huge business opportunities. So, in the following several years, China's online game industry develops rapidly.

In 2005, China's online game market competition was fierce in all categories, and more than 20 online game products released every month. By the end of 2005, more than 200 online game products were available on the market, of which less than 10 percent of products were profitable. Nevertheless, the growth of overall market shares of online game is still fast with generous profits. The actual sales revenue of China's online game market reached RMB 3.77 billion in 2005, up by 52.6 percent over the year of 2004.

Sales revenues and growth rate of China’s online game industry, 2005-2010
(Unit: RMB Billion)
 

The development of China's online game industry also promotes the development of related industries. The sales revenues of telecom operation generated by online game totaled RMB 17.34 billion in 2005, as high as 4.6 times of the actual revenue of online game. Moreover, the sales revenue of IT industry generated by online game also reached RMB 7.16 billion, 1.9 times of that of online game.

By the end of 2005, online game subscribers had reached 26.34 million in China, up by 30.1% over the year of 2004. The CAGR is expected to reach 13.7% between 2006 and 2010, much higher than that of internet subscribers.

China online game subscribers and growth rate, 2005-2010 (Unit: Million)
 

Online game pay subscribers reached 13.51 million in 2005. Its CAGR is expected to be 14.4% between 2006 and 2010, close to the growth rate of total online game subscribers.

China's online game industry has already been at a stable and mature development stage. On the whole, the development of online game industry at this stage presents characteristics of unity and harmony, and it gradually forms an integrated industry chain. Along with the development of online game industry, business of channel vendors, point-card sellers, internet services (Internet cafe) and media are developed rapidly. And online game operators who occupy the most key position on the whole industry chain are becoming more and more mature and rational. Meanwhile, online game companies have already established closely cooperative relationships with leading telecom sectors and online game manufacturers.

From the year of 2005 to 2006, a series of changes have taken place in China's online game industry. Traditional profit model (point-card charges) has already been stricken by new models (free playtime and game value-added charges). Meanwhile, casual online games are becoming popular gradually. This report analyzes China's online game upstream and downstream industry chain, and China's government policies about online game. Data quoted in this report involves not only market scale of online game and quantity of online game subscribers, but also full details about consumer investigation. At the same time, it puts forward a view of risks and problems existed, and the investment opportunities, also provides strategic suggestions on development of China's online game industry.



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