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Online game jamboree
- report from the China International Digital Content Expo 2011

  Getting to know a changing market.
  Getting to know a changing market.
The China International Digital Content Expo (or DigiChina) emphasised the power of the cyber world in Beijing recently. Many Mainland digital content enterprises participated, with innovative products aplenty.

This year's DigiChina was divided into three exhibition halls featuring cultural themes such as online games, animation, web and mobile games, table games, e-sports and cosplay, all fully displaying the thrusting culture of the Internet age.

The theme at the Expo was formed by numerous creative organisations, including ChangYou.com, Shanda Games, Giant, The9 and Tencent.

Also taking part were household names such as Perfect World, Sohu ChangYou, Kingsoft, China.com, Guangyu-Huaxia, Linekong, Baiyou and 70yx.com. Many had eye-catching booths, while the chess and board game teams comprised enterprises such as JJ World and offered some engrossing game opportunities.

Shanda's online game attracts visitors.   Exhibition booth for Tencent games.
Shanda's online game attracts visitors.   Exhibition booth for Tencent games.

The two telecom giants, China Mobile and China Telecom, participated as special exhibitors, attracting the attention of a large number of young visitors.

E-gaming competition.  
E-gaming competition.  
The three leading telecom operators in China set up dedicated mobile phone game bases to provide related services in last year's event. Now, in some communities, the number of game users has already exceeded 10 million, much more than players of traditional online games.

Market size exceeds Rmb30 billion

Although online games have had a later start in China than in the US, Europe, Japan and South Korea, the Mainland online game market has been developing in leaps and bounds.

Online games on the Mainland started 11 years ago, with the launch of the first one, King of Kings. Today, online games have become an essential pillar of the Mainland games market.

In 2000, the size of China's online game market was Rmb30 million. By 2010 the market size rocketed to Rmb34.9 billion, with annual growth at 80%.

  Marketing for online games.
  Marketing for online games.
Now, China's online game sector is forming an industry chain linking development, operations and sales.

Also, the country's capacity to create innovative original online games has forged ahead, totally turning around times when imported online games dominated the market.

Last year, online games developed independently by Mainland firms registered sales of  Rmb19.3 billion, accounting for 60% of the total sales on the country’s online game market and commanding the top position for the fifth consecutive year.

A fair manager said that in 2010 China's online game industry entered its second phase of development. As of now, competition in content deepens, the cost of promotion is getting higher while R&D personnel are becoming more expensive to engage.

Fascinating exhibits.  
Fascinating exhibits.  
As new forms of entertainment such as microblogs and video content continue to emerge and compete, it is becoming increasingly difficult for online games to attract users.

A person in charge of Shanghai Giant Online Technology Co Ltd frankly admitted: "without premier products, it's impossible to sustain the high growth of the industry. Innovation is the core lifeline of online games. For sure, the game sector is so vast, it's impossible for one game to embody much 'revolutionary' innovation across the entire sector."

This year's DigiChina was held shortly after the conclusion of the 6th Plenary Session of the Central Committee.

The CPC Central Committee has considered major issues concerning the deepening of reform to the cultural system to propel the development and prosperity of socialist culture, and efforts are to be made to "develop a healthy and positive online culture, implement digital content project, promote the online dissemination of fine works of traditional culture and contemporary culture, and produce premier works suitable for dissemination by new media such as the Internet and mobile phones."

According to some exhibitors, the growth of the digital content market has further stimulated market change.

  All about interaction.
  All about interaction.
As at the end of 2010, the industry had undergone changes in three areas. First, as players in the Internet industry opened up one after another, rivals in the market turned into co-operation partners overnight. Also, following the rapid rise of mobile Internet, traditional PC terminals are losing out to mobile phones and various kinds of mobile devices.

Both the content and format of online games have been undergoing innovation, too. The development of online games is polarising.

On one hand, the quality of the games is becoming higher and the content is becoming richer; but on the other, as the game devices are becoming more compact, with more social network-friendly and portable, mobile games entering a new round of rapid growth.

Online games have to satisfy the various entertainment demands of users "anytime, anywhere".

Additionally, the trend towards globalisation is irresistible. China is increasing its support for the export of cultural products in its industrial policy, while the growth of Chinese online game enterprises with independent R&D capabilities has pushed exports to record highs.

Room for improvement

Exotic booths at the fair.  
Exotic booths at the fair.  
The issue of industry chain development was not the only concern for exhibitors but was an important discussion point at the expo.

Some exhibitors pointed out that the online game industry chain lacks effective administrative and planning or experienced game assessment organisations. This has affected online gaming's long-term development.

Currently, the absence of a unified administrative and planning department for the game industry in China has put its online game administration system in a rather disorganised position. Unlike the US, Europe, Japan and South Korea, where there are advanced game assessment mechanisms, a vacuum exists in China's game industry.

China's Internet and mobile game market experienced structural changes in 2010, with the growth of the market dropping from 61.7% in 2008 to 26.2%.

Besides, the number of online game users grew just 11.9% since the end of 2009, the lowest growth rate in five years. Indeed, China's online game market in the second and third quarters of 2010 registered negative growth, quarter-on-quarter.

Experts point out that China's online game industry is currently reaching a turning point and will be moving towards a new stage of transformation.

How to meet market demand and successfully undergo industrial transformation is a new issue to be resolved urgently.

from special correspondent Xu Lin, Beijing

Content provided by Hong Kong Trade Development Council
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