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. 

Shanda Game's domestic online games revenue declined 16.6% in Q2 over Q2 2011. There was a decline in overall monthly active users, monthly paying users and ARPU.  The9 also had some trouble in the quarter and the company awaits revenue from anticipated games such as Planetside 2 and Firefall. On the other hand, Tencent's online games revenue rose by 53% in Q2 over the year prior, indicating a stronger emphasis on advanced casual games rather than MMORPGs among the highest paying gamers. After all of the Q2 financial results are announced Niko will compile the 2012 H1 market size and assess market leaders. There is no "Six-Month Update" report this year unlike in past years, but the half-yearly data will be available to clients. 

Piracy continues to be a major problem in China. While business solutions such as online games, F2P business models, and online components of some packaged games have helped put pirates out of business in the games industry, they are still out there. There are many popular websites for illegal downloads of PC offline (single player) games and for console games to be played on illegally imported consoles. There are many mobile app stores that offer pirated games for mobile devices. With the boom in simpler games that are popular on SNS, mobile and casual portals there have been many copies of games marketed by different titles but really looking a lot like each other. And in a blog post on Tech in Asia we learned that recently a Chinese developer is alleged to have copied a game engine, on the heels of unrelated claims that Tencent is hosting a game that was totally copied from a western developer. At some point we just have to ask why the western creative developers cannot compete directly on Chinese soil, help to train and build a new class of Chinese creative developers and perhaps manage to outpace piracy through innovation - another business led solution - rather than via regulations that evidently are not working well.  

Baidu, a leading Chinese Internet search engine, has announced it will launch an original client-based MMO called Xi You 3 (another Journey to the West tale). This is Baidu's first MMOG, and it is reasonable to ask why a search engine company needs to launch a MMOG. Baidu purchased a Chinese game studio to accomplish this strategy. Some financial analysts say that client-based MMOGs are going the way of the dinosaur, but we disagree with that. Other segments are growing rapidly but client-based MMOGs are still responsible for most of the games revenue in China and will continue to be for the foreseeable future.