Tencent is performing quite well in 2009 with several hit games in China, one of which is Dance that just hit 1.18m PCUs. The company also now has two US offices and is moving ahead with a US market entry strategy. Tencent surpassed Shanda in the first half of 2009 for Chinese online game revenue.

Currently Sony's PSP is one of the banned systems in China, though it is widely available in pirate stores and is considered to be trendy to own. If consoles and handhelds are permitted in the future, digital distribution of games will be imperative. Therefore the success of the new PSP Go may be a predictor of market success for a similar product in China in years to come.

Niko is watching for any new report by Chinese officials that might further clarify the regulatory authority by the Ministry of Culture and GAPP over games. The MOC seems to be overstepping the authority outlined in a September notice by the government which seemed to give the MOC greater authority but still assigned some control to the GAPP.