On-line game operators seek for new way of profit making
26/3/2006 11:02
As the fierce battle rages on the computer screen, few of the overly
engrossed on-line gamers are aware of the corporate battles being fought for
their attention and an end game worth billions of yuan a year.
Internet
gaming in China has become a huge business in an extremely short period of time
with the industry expanding seven folds in the past five years.
While
industry leaders sink more and more resources in their games and services
they're now seeing the number of people playing on-line games is beginning to
level out.
This scenario of heavy investment and a consolidating market, has
led to some audacious moves over the past year.
China's on-line game
front-runner, Shanda, stopped charging gamers for time spent playing. The risky
maneuver has yet to pay off and instead of capturing the market Shanda ended up
reporting a huge loss in its fourth quarter last year.
Meanwhile upstart game
provider T2CN is working on another strategy to win more eyeballs to its games.
It has teamed up with corporate sponsors to score points at its bank by
embedding advertising in its games.
T2CN won't say much Coca-cola paid to
have its logo plastered all over its on-line basketball game but admits on-line
advertising brings in several million yuan a month. T2CN expects income from
in-game advertising to rise 20 percent a month by the end of the year.
For
players the competition between game providers has just about put them in a
win-win-win position but many are realizing that the freebies come with a
cost.
"I don't really mind all the logos and brand names of Coca-cola when
I'm playing," said Mao Kaijun, a young guy in his 20s who spends around 100 yuan
playing on-line games every month.
The young players also know that not being
charged for time playing the game doesn't mean its free. The game providers let
their subscribers stay on-line as long as they like, but if they want to be
competitive they have to pay for weapons or special articles that will let them
more easily advance through various levels.
"The balance of the game has been
broken as you can pay to get powerful weapons from the operator and so skill is
no longer important,"said Mao.
"Players feel the games have become quite dull
as you can pay to get everything," he said.
Mao has been an on-line game
player for seven years and has witnessed the growth of the booming industry in
China. He and hundreds of thousands of young people around the country have
switched from spending hours lounging in front of boob tube to evenings fixated
on the flat screen. All over the country they can be found jammed into their
local 'wang ba' or 'internet cave', some of which are fancy night clubs
resembling discos with hundreds of computer stations.
Yet official statistics
show that in the past two years China's growth in on-line game subscribers may
be peaking. The number of gamers is only growing by about 10 percent a
year.
There are several reasons for this and on-line game providers had
better be paying attention if they want to reach the next level and find a pay
off for their investment.
For Mao and his young buddies the novelty of it all
just might we wearing off. "We are tired of the games which are always about
killing monsters," said Mao.
Older people are also starting to take notice of
the young people's near addiction to killing monsters. Parents, teachers and
psychologists are worried about the wasted time, wasted money and the possible
bad influence of the seemingly ludicrous phenomena that has totally absorbed so
many youth.
Yet game providers are forging ahead into new markets. While they
have just about penetrated most urban centers the next challenge are small towns
and rural areas.
Despite industry leader Shanda's reported 539 million yuan
loss in the fourth quarter ending last December smaller companies are still
streaming into the business.
The China Center for Information Industry
Development predicts that the country's on-line gaming industry will grow by 41
percent to 22.7 billion yuan by 2010.
"With more and more on-line games and
operators, China's on-line gaming market will see more heated competition this
year," said Zheng Ling, senior analyst with International Data Corporation.(US$1
= 8.02 yuan)
Xinhua
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