Asiasoft is a leading regional online game operator in Southeast Asia, a region that Niko began tracking in 2010. The company has operations in Thailand, Singapore, Malaysia, Vietnam and now Indonesia. It has made its mistakes but seems to "get it" with regard to regional operations. Today the company utilizes its own infrastructure plus local operators in some of those countries. In a recent interview in the Bangkok Post, the Vice-Chairman of Asiasoft declared that they intend to build a regional platform, which would eliminate the need for domestic operators and enable regional gaming for its registered users. Niko's own view of Southeast Asia is that there are big differences among the countries, but for online game companies (from the West or other parts of Asia), a regional strategy and regional understanding is necessary to succeed there. Our 2011 Southeast Asia Games Market Regional Report will be published in November, and research is well underway for that report.

Just when we wondered if Tencent could attain any more share in China's online games market, since the company holds about 30% of the domestic market share already, it forges a strategic partnership with Kingsoft by purchasing 15.68% of its shares from existing shareholders over time. This is a minority ownership to be sure, but one of Kingsoft's primary lines of business is the development and operation of online games. We will watch to see if there is any impact on the online games divisions of these companies. Recall that Electronic Arts purchased roughly 17% of the9 a few years ago, and then wound up selling its shares after that investment did not go according to plan.

China's online games industry began with imported licensed games developed in Korea. In the past year Niko and other observers have witnessed a global expansion by Chinese online game operators taking their in-house developed games to new markets, mostly in Southeast Asia and North America. 10 years after the first Korean online game hit mainland China the Chinese companies are starting to enter Korea in earnest. While the Chinese companies may be wise to first tackle countries that do not have as much homegrown online games muscle as Korea, it is definitely a ripe market for savvy companies to enter.

Additionally, and in a different manner, Chinese games are making an impact in India. India allows consoles and has far fewer Internet cafés than China (1/5th  as many, perhaps). But Indian gamers prefer to buy cheap pirated copies of console games for their modded systems rather than pay full price for legit games. The pirated games originate in China (primarily) and find their way to pirate stores in India where gamers spend 1/10th the money on them than they would need to pay for a legit game. Online games are picking up speed too, but with so few I-cafés and presumably low home PC penetration, it will take a while to really grow that segment of the games market. China's ban on consoles and subsequent lack of availability of legit games in legit software retail stores has promoted a big industry for pirated console games to serve the millions of Chinese console owners. Now the problem of pirated console games has become a problem of illegal exports of pirated products to clog legitimate markets where console game pricing is too high for the mainstream population.