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Online Gaming - China - Sample

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The online gaming market in China has been growing steadily and is estimated to grow dynamically in the future. The large user base coupled with major research and development initiatives pursued by …

The online gaming market in China has been growing steadily and is estimated to grow dynamically in the future. The large user base coupled with major research and development initiatives pursued by the players will drive the market. Players have been adopting various business models towards generating profits based on their capabilities. A Wide spectrum of games has been developed towards catering to large scale audiences with varied preferences. Players are competing at the international level using their own expertise which has been developing constantly.

The report begins with an overview of the global gaming industry with emphasis on the Asia-pacific region. It introduces China’s online gaming market including market size and growth figures coupled with the forecasted increase in user base. The various business models pursued by establishments coupled with the range of games offered to the consumers have been highlighted.

The drivers and challenges explain the factors influencing growth of the industry including growth in broadband subscribers, steady rise in computers purchased, large number of consumers being drawn to online gaming, growing revenues from advertisements, growth in mobile internet users and large demand from the export market. The key challenges identified encompass the cumbersome market entry procedure, protectionist approach adopted by the government, online gaming segment fraught with cyber criminals, low internet penetration level and introduction of the anti-game addiction programme.

Key characteristics of the market has been highlighted covering the growth in pre-paid gaming cards, government clamping down on online games content, focus on research and development, branding taking priority among players in the market, players competing in the international market and operators non-compliant with virtual currency regulations.

Competition section profiles the major players in the market. The section contains a snapshot of their corporation, financial performance and business highlights, providing an insight into the existing competitive scenario.

Published in: Technology, Business

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  • 1. Online Gaming - China November 2009
  • 2. Executive Summary SAMPLE Market Drivers & Challenges Trends Competition
      • China’s online gaming market has been identified as the largest online gaming market globally
      • Estimated worth USD 3 bn in 2008; Expected to grow to USD 10 bn in 2012
      • Online gaming user base expected to rise by 15% annually over 2009-13
      • Growth in Pre-paid Gaming Cards
      • Government Clamps Down on Online Games Content
      • Focus on R&D
      • Branding Taking Priority Among Players in the Market
      • Players Compete in the International Market
      • Operators Non-compliant with Virtual Currency Regulations
      • Industry is highly fragmented with heightened competition amongst players in this space
      • Tencent Holdings Ltd. is the largest player in the market
      • Export market is dominated by Perfect World Co. Ltd.
      • Drivers: Growth in broadband subscribers, steady rise in computers purchased, large number of consumers drawn to online gaming, growing revenues from advertisements, growth in mobile internet users and large demand from the export market
      • Challenges: Cumbersome market entry procedure, protectionist approach adopted by the government, online gaming fraught with cyber criminals, low internet penetration level and introduction of the anti-game addiction programme
  • 3.
    • Market Overview
    • Drivers & Challenges
    • Market Characteristics
    • Competition
    • Key Developments
  • 4. China’s online gaming market is expected to grow with the increase in paid user base
    • China’s online gaming market has been identified as the largest online gaming market globally
    • The industry is estimated to grow at a% annually up to 20--
    • The market is fragmented with a large number of small players
    • Growth in internet access and infrastructure will drive the market
    SAMPLE Overview Market Size and Growth China Online Gamer Base Source: u 2008 v 2009e w 2010e x 2011e y 2012e a% USD bn Growth in Online Games Developed p 2007 q 2008 c% l1 l2 l 2009 m1 m2 m 2013e Type 1 Type 2 b% mn Growing share of Type 1 users
  • 5. Drivers & Challenges Large Demand from the Export Market Growth in Mobile Internet Users Growing Revenues from Advertisements Large Number of Consumers Drawn to Online Gaming Steady Rise in Computers Purchased Growth in Broadband Subscribers Drivers Introduction of the Anti-game Addiction Programme Low Internet Penetration Level Online Gaming Fraught with Cyber Criminals Protectionist Approach Adopted by the Government Cumbersome Market Entry Procedure Challenges
  • 6. Market Characteristics
    • Growth in pre-paid gaming cards
    ` Operators non-compliant with virtual currency regulations Focus on R&D Branding taking priority among players in the market Key Characteristics Government clamps down on online games content Players compete in the international market
  • 7. Industry is highly fragmented with heightened competition amongst players in this space
    • The market comprises of a large number of players
    • Large cross-section of players have been focusing on the casual online games segment as they are unable to invest and develop the more complex multiplayer games
    • Players have been focusing on improving their market position through the introduction of new games and regularly developing their existing games portfolio
    SAMPLE Overview Market Share Source: Revenues Generated from Export Market x% Type 2 w% Type 1 Revenue Split p% Company 6 q% Company 7 r% Company 8 s% Company 9 t% Company 10 u% Company 11 v% Others b% Company 4 Company 2 Company 3 a% Company 1 Company 5 e% c% Others f% d% 1.5%
  • 8. Profiles of Major Players (1/6) SAMPLE Source:
    • Established in 20--; Headquarters in A
    • Management Team: Person 1 – Chairman; Person 2 – CEO
    • Operates in the massively multiplayer online role-playing game (MMORPG) space and is a subsidiary of Company Q
    • Partnered with Company R for the distribution of online mobile phone games
    • Signed a multi-license deal to use Company C as their platform for future games
    • Three new games are currently in the pipeline
    • Financials: 20-- - Revenue – USD x mn; Profit – USD y mn
    Company 2
    • Established in November 20--; Headquarters in B
    • Management Team: Person 2 – Chairman and CEO; Person 3 – President
    • It invested USD T mn towards the development of a new 3D game
    • It has built a distribution network in order to sell prepaid game cards and game points required to play its games
      • Its outreach, as of March 20- -, consisted of over u distributors reaching q retail outlet
    • Towards enhancing R&D capabilities, the company allocated a total investment of USD G mn in the first half of 20--, with plans to launch h new games by mid-20--
    • The company plans on investing USD J mn on television advertisements towards enhancing visibility of their products
    • Financials: 20-- - Revenue – USD v mn; Profit – USD k mn
    Company 3 Business Description Company
  • 9. Thank you for the attention About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. The Online Gaming – China report is a part of Netscribes’ Media & Entertainment Industry Series. For more detailed information or customized research requirements please contact: Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. Natasha Mehta, CFA Phone: +65 8448 0449 E-Mail: [email_address] Gagan Uppal Phone: +91 98364 71499 E-Mail: [email_address]