Many Chinese game operators continue to be optimistic in 2009, stating that the worldwide economic downturn has had little effect on their business. Games constitute a small-ticket item and users have not cut back as much on this type of discretionary spending.

Allison Luong, Managing Director of Pearl Research said, “Trends to track in 2009 include the growth of social networking sites in China, with over 55 million users, and their cross-pollination with games. One overall concern is the lack of diversification with many game operators relying on a single title for the bulk of revenues. In addition, a glut of content with more than 200 games on the market, makes releasing a breakout hit increasingly difficult.”

Pearl Research’s findings:

• China’s most popular online game, Netease’s “Fantasy Westward Journey” achieved 1.8 million peak concurrent users, followed by Giant’s “Zhengtu Online” with 1.5 million users, Tencent’s “Dungeon and Fighter” at 1.2 million users, and Blizzard’s “World of Warcraft” at 1 million.
• Game operators in China experienced strong revenue growth in 2008. Six game operators, Tencent, Changyou, The9, Netease, Shanda and Giant crossed the $200 million revenue mark.
• Approximately 70% of China’s 298 million Internet users are under the age of 30. This group is most likely to seek out online entertainment, including games, music, and chatting, which Pearl Research believes will drive revenues for the online gaming market.