2006.07.28

ChinaJoy opens, Ma Huateng Comments on Internet Game Industry and Points out Dominant Trends

Shenzhen July 28 2006 – For a long time now the insignificant role played by domestic Internet games in China's Internet games market has been a sore point among Chinese game developers. However with the transformation of China's Internet game market from an agency system to an independent development system this pain has started to ease. Diversification independent development and social responsibility will be the three dominant trends in China's Internet game development declared Tencent Chairman and CEO Ma Huateng during the opening ceremony of the 4th China Digital Entertainment Expo & Conference ("ChinaJoy").

The development of China's Internet games has experienced four major stages Ma told journalists. During the first stage (1997–1999) pioneering Chinese game operators emerged in the market. They explored ways in however were left behind by their overseas peers. During the second stage (2000–2001) operators mainly worked as agencies of foreign Internet game developers. Profit models started to emerge. During the third stage (2002–2004) the agency and independent development models co-existed while the latter started to take off. The age of brand competition had arrived. In this fourth and latest stage (2005–present) all companies have been exploring new products and operating models. Market standardization has started to take effect. China's Internet games market is now characterized by three trends i.e.: diversification independent development and social responsibility.

After several years of market development a segmented and diversified market of Internet games has already gradually come into being Ma believes. Various categories of games including RPG casual games real-time strategy and business simulation will develop in parallel satisfying diversified demands for different customers. Following the trend of diversification domestic Internet game manufacturers are starting to develop specific strengths. The number of Chinese Internet game developers is now over 200 while the total number of developers exceeds 12600. In the past year scores of Chinese independently developed games have hit the market and Chinese-developed Internet games now account for about half of the market share. The majority of Internet users are now playing Chinese online games. In terms of game content China possesses many historical stories game players have taken a strong liking to while many domestic frontline game manufacturers such as NetEase and Tencent have created competitive differentiation based on independent development. Because of market standardization and in response to public concerns domestic companies have also attached great importance to social responsibility in their Internet games. In 2005 seven game manufacturers including Sanda signed jointly the Statement of Protecting Minors' Health Building a Healthy Environment for Internet Games and Preventing Indulgence. Tencent's Internet games have been included in the first group of socially responsible Internet games recommended for minors by the Ministry of Culture. All these efforts have resulted in a healthy industry environment in which domestic Internet games can thrive.

According to Ma the prosperity of domestic Internet games in recent years has come from many factors such as rich stories engaging designs sharply lowered operating risks social responsibility guidelines and launch of national brands. From a design and story standpoint Chinese Internet games have already reached the level of their overseas peers. One example is QQ Fantasy from Tencent which has become the most popular Chinese-developed Internet game with a record 660000 players participating in public tests of the game.