Niko News is a filter of the most important news items and bits of information concerning the games markets of China and Southeast Asia uncovered by Niko each week. Our multilingual analysts review dozens of news sources from several countries, and as a team Niko reduces the long list of articles to 3-4 "must read" items for you. We then provide our Niko analysis to these items, making them relevant and highlighting the importance for the market. This service is one of the many ways we help distill the confusing, conflicting information about the games markets of Asia for our clients and readers. 

Tencent's first quarter results, announced May 16th, were quite impressive. Online games revenue was up 19.4% in Q1 over Q4 2011, thanks to powerhouse hits such as League of Legends, Cross Fire, QQ Dancer, and Dungeon and Fighter. The company now has 752 million active QQ instant messaging accounts. That is more than 2x the total population of the US. Tencent's SNS sites are still dominant in China, with 517 million Qzone users and 214 million Pengyou users. Tencent already had 40% Chinese market share of online games in 2011, and it is likely that their share will rise this year. We will explore their SNS business further in our upcoming Casual and Social Online Games Report (July). 

China Internet Café Holdings Group released its first quarter results and shed some light on the costs associated with opening and running an I-café in China. The company owns 59 high-end I-cafés in Guangdong, and plans to open one more this quarter. Their newer I-cafés even offer movie screening rooms and gaming tournament facilities. The average revenue of an I-café that has been open for more than 1 year is $40,891 per month. According to the earnings release the average capital expenditure to open a new store varies by size and location but typically averages $250,000. With average annual revenue per store of $500,000 and a 28% net margin, the average payback period is less than 2 years. In Niko's reports of past years we estimated that the average annual revenue per I-café is about half of that, or $250,000. These I-cafés are probably large and very swanky, as our average was for all 140,000 licensed I-cafés in China.

Chinanews.com released statistics from iResearch showing that games are the most downloaded apps on China's mobile app stores. Mobile online games revenue was said to have risen by 86.8% in 2011 over 2010. With the launch of smartphones from major online game operators, a boom in the number of 3G smartphone users, and the ease of downloading mobile games from the hundreds of mobile app stores in China, Chinese mobile online games are set to enjoy hot growth over the next several years. We will explore this more in our June report on mobile gaming.