Niko News on China's Video Game Market
Volume 45
July 2010

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Weekly Twitter Posts

Niko's data also estimates high number of (illegal) PSP sales in China http://bit.ly/ahtrJ911:26 AM Jul 21st via CoTweet

CNNIC released latest data and China's Internet users rose by 31% from January to June 2010 to 420 million. 8:30 AM Jul 16th via CoTweet

RT @Kotaku Why Are Consoles Banned In China? http://kotaku.com/5587577/ 6:16 AM Jul 16th via CoTweet

Zynga is getting more serious about China as it purchased 2 Chengdu studios recently, after buying 1 in Beijing in May http://bit.ly/axXsqf 7:00 AM Jul 13th via CoTweet

More regs for Chinese online game co's: now they must avoid sex and vulgarity as themes in ads for their games http://bit.ly/c5gB5Mabout 7 hours ago via CoTweet

Google Says Chinese Government Renewed Its Internet Licensehttp://bit.ly/aOJZQsabout 9 hours ago via CoTweet

Apple's Invasion of China Begins With This Shanghai Apple Storehttp://tcrn.ch/9mG2hi10:30 AM Jul 7th via CoTweet

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StarCraft II's July 27th launch in most major geographies except Japan and China should be a big day in the 2010 games market. The game is sure to be a success in South Korea, where gamers still flock to play the original StarCraft, especially since StarCraft II will be free in Korea to gamers with an active World of Warcraft subscription. As Chinese gamers are still waiting for WoW's Wrath of the Lich King to be approved, it seems unlikely that three Blizzard titles (WLK, WoW: Cataclysm, and StarCraft II) would all be approved for release in China in 2010. Blizzard, it's Chinese operator NetEase, Chinese Blizzard game fans, and Niko are all hopeful though. Pirated sales of WarCraft were one reason that WoW was such an instant blockbuster game in China (everyone knew the franchise already), and we will wait and see what happens with StarCraft II in China.
According to a report from the NPD Group, 48% of PC games sold in the US in 2009 were sold digitally. There has been a year-on-year decline in physical game sales so far and physical unit sales just barely edged out digital distribution last year. A majority of the sales were through Valve's Steam store and Bigfishgames.com, as well as through Worldofwarcraft.com and EA.com. Not only is this trend a greener approach to the video game industry by sparing everyone boxes and plastic pieces, but the success of digital sales is encouraging for the developers and publishers fighting piracy across the world. In China we have witnessed pirate sales of physical copies of games plummet as illegal downloads take their place. We believe that a business-led solution to the piracy problem in China would be more successful than a regulatory solution, and we hope that leaders such as Valve go to market here as soon as there are enough approved titles to make it worthwhile for them.
While admittedly our audience is too small to draw conclusions for all of China, a sneak peek into the findings from Niko's latest Chinese Gamer Focus Groups (12 groups in 2 cities) show that women do buy virtual items and spend money in casual game virtual economies, but not at the rate of twice as much as men as the PlaySpan and VGMarket study found in other parts of the world. Our Focus Groups Findings Report will be released to clients and available for sale on August 2nd.

Niko News is just part of the market intelligence experience offered by Niko Partners to help you better understand the thriving video game market of China.

Niko Partners is the premier provider of market intelligence and custom research services on China's video game industry. There are more than 70 million Chinese gamers eager to play hit titles on systems with the latest technologies. With Niko Partners market intelligence services, you can get to know these gamers, find Chinese partners, and use our actionable market data to build and execute your strategic plan.
If you have any questions or if you have a project that could use our assistance, please let us know at info@nikopartners.com or contact Megan Carriker at 336-326-5595 or megan@nikopartners.com