Report Shows Surge in the Chinese Video Games Market in 2006

Niko Partners, a market intellegence firm for China’s videogame industry, announced results from its latest report showing impressive growth for the Chinese videogame market in 2006.

According to the report, China’s overall video game market jumped 68% in 2006, with the online games segment generating 995 million in revenue, and up 74% from 2005.

Lisa Cosmas Hanson, Managing partner of Niko Partners, said “Chinese online game operators introduced free-to-play massively multiplayer games that are, in fact, not at all free, because gamers spend money on virtual items and services in the game. These free-to-play games helped the market size rise above expectations in 2006. In addition, the country added 3.4 million total gamers in 2006 and now boasts 37.5 million gamers, 90% of whom play online games.”

The report accounted for approximately 20 million Chinese internet cafe PCs, which make it possible for gamers without PCs at home to play online games. These cafes also serve as centers for social interaction for 18-24 year olds.

“The intertwined nature of Chinese internet cafes, social gaming culture, and few entertainment alternatives at a low price point, will continue to be the basis for strong growth through 2011,” added Hanson.

Other market segments fared well in 2006, particularly PC offline games and console hardware, even though console sales are prohibited and unavailable through legal channels in China.

Niko Partners 2007 Chinese Video Game Market Annual Review and Forecast Report is based on 75,000 points of data collected in 10 Chinese cities in March 2007. The report is the first of three in Niko’s 2007 annual subscription on China’s video game industry.

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