Making Money In Online Gaming

Online gaming is ChinaÂ?s newest gold mountain according to a report in the PeopleÂ?s Daily. Shanda got the ball rolling by using a second tier Korean game, Legend to open the market. Today Shanda has revenues of 400 million Yuan. There are more than 100 commercial online games live in the China market at present. As with SMS, it was the portals that profited from the online gaming phenomenon first. Netease was first to profit with just two games; Sina entered the market with Korean gaming giant NCSoft; Sohu started with yet another Korean game Knight online; and 21st century launched a game called The New Journey West. Sohu stated network gaming is a natural progression for portals, especially multimedia portals. ChinaÂ?s software companies have been in the gaming industry since 1995 but due to rampant piracy have struggled to turn a profit. Market numbers company IDC predicts China online gaming will be worth 8 billion Yuan by 2006. However, in a Kingsoft survey of the market, it found only 10 network games have more than 70,000-80,000 people concurrently online, and the market is really only big enough for five to six vendors. Out of 100 vendors producing games, at least 70 are losing money. The Koreans remain the biggest players in China, with domestic companies mostly paying the US$1 million license fee to operate games. According to the Korean Government statistics Korean gaming companiesÂ? yearly revenue from ChinaÂ?s online game market is more than 1 billion Yuan.