Millions of gamers find romance online, but most games companies are losing money
Tens of millions of Chinese citizens are flocking to online games, seeking fun, love and money, according to new research.
The number of online gamers in China will expand from 25.5 million last year to 61 million in 2010, predicts US research firm In-Stat.
"Chinese gamers are motivated by the opportunity to interact and communicate with a variety of other people, particularly those of the opposite sex," In-Stat analysts wrote in a research summary.
"There are countless stories of relationships, and even marriages, initiated and fostered in the confines of a virtual game world.
"Many online gamers in China are also motivated by financial gains that may be derived from their hobby."
The research firm suggested 'e-sports', competitive games paid for prize money and sponsorship, as one way in which China's online gamers can profit from playing.
Other sources have claimed that tens of thousands of people work in China's underground 'game farming' industry, playing all day to earn in-game items which can be sold for real cash outside China.
But despite the market's growth, 85 per cent of China's more than 300 online gaming companies are not making a profit.
The market is so competitive that many companies have been offering games for free, hoping to generate cash from sales of in-game items, advertising and other services.
Of the 25.5 million estimated online gamers playing last year, only 16 million were paying to play, according to Anty Zheng, In-Stat's research director in China.
A handful of well established companies control 80 per cent of the market, among them Shanda, Netease and The9. The latter operates World of Warcraft and Guild Wars in China.
Netease and The9 both reported a profitable fourth quarter last year, but Shanda slumped to a substantial loss after it switched some of its popular older games to the free-play model.
Like many of China's leading internet firms, most of the larger online games operators list their shares on the US Nasdaq stock market in the form of American Depositary Receipts.
This has helped them to secure investment, but also binds them to stricter financial reporting standards than their smaller rivals, forcing them to reveal losses.
As well as a competitive market with an emphasis on low prices, China's online games operators have to cope with government regulations that change rapidly and are often worded vaguely.
For example, Shanda's efforts to market a home media and gaming appliance, the EZ Station, have been hit by its inability to secure a hard-to-get IPTV broadcasting licence from the government.
In addition, recently introduced regulations which restrict online players to a maximum of four hours play per day per game are seen by In-Stat as a "market barrier".
Tens of millions of Chinese citizens are flocking to online games, seeking fun, love and money, according to new research.
The number of online gamers in China will expand from 25.5 million last year to 61 million in 2010, predicts US research firm In-Stat.
"Chinese gamers are motivated by the opportunity to interact and communicate with a variety of other people, particularly those of the opposite sex," In-Stat analysts wrote in a research summary.
"There are countless stories of relationships, and even marriages, initiated and fostered in the confines of a virtual game world.
"Many online gamers in China are also motivated by financial gains that may be derived from their hobby."
The research firm suggested 'e-sports', competitive games paid for prize money and sponsorship, as one way in which China's online gamers can profit from playing.
Other sources have claimed that tens of thousands of people work in China's underground 'game farming' industry, playing all day to earn in-game items which can be sold for real cash outside China.
But despite the market's growth, 85 per cent of China's more than 300 online gaming companies are not making a profit.
The market is so competitive that many companies have been offering games for free, hoping to generate cash from sales of in-game items, advertising and other services.
Of the 25.5 million estimated online gamers playing last year, only 16 million were paying to play, according to Anty Zheng, In-Stat's research director in China.
A handful of well established companies control 80 per cent of the market, among them Shanda, Netease and The9. The latter operates World of Warcraft and Guild Wars in China.
Netease and The9 both reported a profitable fourth quarter last year, but Shanda slumped to a substantial loss after it switched some of its popular older games to the free-play model.
Like many of China's leading internet firms, most of the larger online games operators list their shares on the US Nasdaq stock market in the form of American Depositary Receipts.
This has helped them to secure investment, but also binds them to stricter financial reporting standards than their smaller rivals, forcing them to reveal losses.
As well as a competitive market with an emphasis on low prices, China's online games operators have to cope with government regulations that change rapidly and are often worded vaguely.
For example, Shanda's efforts to market a home media and gaming appliance, the EZ Station, have been hit by its inability to secure a hard-to-get IPTV broadcasting licence from the government.
In addition, recently introduced regulations which restrict online players to a maximum of four hours play per day per game are seen by In-Stat as a "market barrier".
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