China’s gaming sector has seen a massive surge in sales and revenue, primarily from MMOs and PC games, but the illegal import and sale of consoles such as the PlayStation 3, Xbox 360 and Wii have contributed mightily to the country’s gaming conscience.
According to research from Niko Partners, a market-intelligence firm focused on China’s video game industry, China’s 46 million gamers spent $1.7 billion USD on online games in 2007, up 71 percent from 2006. Casual and casual online games made up 21 percent of the total.
Yet sales of the PS3, Xbox 360, Wii and PS2 surged as well — in spite of a nationwide ban on console sales that’s been in effect in China since the year 2000.
“In spite of [this] regulation, gamers are flocking to stores that sell illegally imported Wii, Xbox 360, PS3 and PS2 machines to take part in the excitement of console gaming,” said Lisa Cosmas Hanson, managing partner of Niko Partners. “While these consoles are expensive for the average Chinese consumer, gamers are willing to spend money on them to supplement their online gaming experience, and unit sales hit 2.48 million units in 2007, up 75 percent over 2006.”
Piracy remains an issue for packaged software via digital downloads and counterfeit copies, but legitimate sales of packaged offline PC games surged 56 percent in 2007.
“China’s spending on games is up thanks to their booming economy,” said Hanson. “14 million hardcore Chinese gamers play online games more than 22 hours per week. They play online, LAN and single-player offline PC games in China’s 185,000 Internet cafes and increasingly on their PCs at home, thanks to falling prices and higher disposable income.”
Niko Partners predicts that online revenue will reach $2.5 billion in 2008 and $6 billion in 2012, for a 29-percent compound annual growth rate in the five-year period.