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. 

New data by Canalys, as related by Tech in Asia, says that there were 82 million smart phones shipped in Q1 in China. Shipments do not equal units sold but it is a good measure anyway, and those 82 million were on top of the more than 200 million already in use in China before Q1. If we assume the rate of shipments increases throughout this year (as it well could), then even if only 60% of those shipments got into the hands of consumers, we could expect to have more than 500 million smart phones in use in China by the end of 2013. This will be up from roughly 200 million at the end of 2012.

The reduction in staff of Tencent's North American operations indicates a change in strategy for expansion to the West, but as it impacts only 20 people or so, the move is not as noteworthy as indicated in some of the press accounts after the announcement. In fact, Tencent might be acknowledging the global decline in social games for the PC platform by cutting the development staff that had been working on such games (Tencent ran a brand called Icebreak in Palo Alto that made a handful of Facebook games). The giant company still has the North American studios it has acquired and invested in, most notably (yet not limited to) a majority stake Riot Games and 40% of Epic Games. Perhaps the staff cut simply means Tencent does not want to focus on building social games for American PC social networks at the moment.   

We watch the free-to-play business model continue its global domination as Trion's RIFT is the latest major MMOG to convert into an F2P game. RIFT is operated in China by Shanda. Shanda is the online game operator who boldly proclaimed in late 2006 that most of its online games would convert to a "new" business model called free to play. Shanda maintained the time-based model for some triple A titles, such as AION, but can be credited for jumpstarting the F2P craze way back when.