Revenue a challenge for online gaming
By Zhu Shenshen |
July 23, 2010, Friday
|
Print Edition
Print Edition
CHINA'S online game market posted the first slowdown in revenue growth for more than a year in the second quarter of this year, a Shanghai-based IT research firm said yesterday.
The lack of hot titles and decreased revenue of small-sized firms led to the drop, according to iResearch Inc.
In the April-June period, the domestic game market revenue was 7.34 billion yuan (US$1.1 billion), up 8.8 percent from a year ago, compared with an annual 21.4 percent increase in the first quarter, iResearch said.
"The game market growth has faced a bottleneck, and the high-growth period has passed," iResearch said.
Over the past few years the Chinese game market revenue grew 30 to 50 percent annually.
Another analyst, however, had a different opinion.
Despite concern over a slowdown, most Internet chief executives expect China's online game industry to grow 20 to 30 percent annually, said Richard Ji, a Morgan Stanley analyst.
But iResearch and Ji both expected high growth in the top game firms.
Tencent should have more sales potential, as only 10 percent of its users are paying, while its online game revenue per user is 30-50 percent below peer levels. NetEase will also expand its market share as it owns "one of the most robust game portfolios" in the industry, Ji said.
The top three firms had a combined 58.3 percent market share by the end of June. By the end of second quarter, Tencent had a market share of 27.2 percent, followed by Shanda's 15.9 percent and NetEase's 15.2 percent, iResearch said.
Smaller firms faced revenue problems in the second quarter because of a lack of popular titles, iResearch said.
The lack of hot titles and decreased revenue of small-sized firms led to the drop, according to iResearch Inc.
In the April-June period, the domestic game market revenue was 7.34 billion yuan (US$1.1 billion), up 8.8 percent from a year ago, compared with an annual 21.4 percent increase in the first quarter, iResearch said.
"The game market growth has faced a bottleneck, and the high-growth period has passed," iResearch said.
Over the past few years the Chinese game market revenue grew 30 to 50 percent annually.
Another analyst, however, had a different opinion.
Despite concern over a slowdown, most Internet chief executives expect China's online game industry to grow 20 to 30 percent annually, said Richard Ji, a Morgan Stanley analyst.
But iResearch and Ji both expected high growth in the top game firms.
Tencent should have more sales potential, as only 10 percent of its users are paying, while its online game revenue per user is 30-50 percent below peer levels. NetEase will also expand its market share as it owns "one of the most robust game portfolios" in the industry, Ji said.
The top three firms had a combined 58.3 percent market share by the end of June. By the end of second quarter, Tencent had a market share of 27.2 percent, followed by Shanda's 15.9 percent and NetEase's 15.2 percent, iResearch said.
Smaller firms faced revenue problems in the second quarter because of a lack of popular titles, iResearch said.
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