Kaixin001, one of China's leading SNS companies, announced that it estimates the company's 2010 revenue to reach $20-30 million USD, up from $10 million in 2009, and anticipates doubling 2010 revenue in 2011. Not all of this revenue is generated from SNS games, but games are a leading application on the site. They claim to have 90 million users, rising by 3 million monthly and should achieve more than 100 million users by the end of this year. This data supports Niko's analysis that SNS gaming is growing rapidly and is a primary driver for growth in the number of online gamers, though SNS gaming is also distracting some hard-core gamers from playing MMORPGs.

The Film Copyright Society of China announced a new regulation imposing royalties on Internet cafes to compensate for revenue generated by offering movies for customer viewing on the Internet cafés' PCs. In addition to Internet cafes, long-distance buses, airplanes and trains are also included in the list of those who may have to pay fees to the organization. The royalty is .24 RMB ($0.035) per PC. Some Internet cafés already pay for legal use of movies including royalties, so this would be a double fee for them. In addition, as Niko has noted in our Chinese market studies this year, the Internet café industry is experiencing falling revenues. Some urban markets felt at least a 20% decline in revenue, primarily due to rising home broadband and PC penetration levels. There are approximately 138,000 Internet cafés in China.

Perfect World's global push continues. The company has realigned its international business units to help drive new business and support existing business. Perfect World exports games to 60 countries and regions and expects 2010 overseas licensing revenue to reach $100 million, up from $31 million in 2009.