Niko's forecast for 2009 revenue of $3.65 billion (24.9 bil RMB) is right on target, matching what the China Games Industry Assoc (CGIA) announced at the Ministry of Culture's conference held in Beijing on December 1st. What surprised us was that there are 750 online game companies - it is unclear how those were defined or categorized. Regardless, only about 20 of them make significant revenue. There were 350+ SNS companies launched in 2009 alone, so if those companies are declaring themselves as online game companies because of social games, perhaps that gets us part way to that large total.

Shanda continues to do well and demonstrates that China's game market is still on its upward trajectory. The company previously held the #1 spot in terms of online game revenue in China, but was overtaken by Tencent earlier this year. Shanda remains a powerhouse though, and its Q3 revenue of $202 million is quite impressive.

Here is more evidence that if China is patient enough it will never have to figure out how to generate revenue from the sale of packaged games, because the whole world will convert to online games over time. With a company the size and stature of EA cutting packaged releases by 20% in favor of digital, it underscores the importance of China's online games business models for the rest of the world.