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Online Games Market in China 2012
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• Casual Games Market worldwide
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• Social networking and social media in China
• Phoenix Generation consumer studies
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3. Table of Contents
Methodology..................................................................................................................1
Glossary of Terms and Abbreviations ............................................................................3
Executive Summary........................................................................................................4
China PC Hardware ........................................................................................................7
Internet and Broadband ................................................................................................9
“The Great Firewall of China” ......................................................................................11
Games Market Top Trends ..........................................................................................12
Emergence of Web Games ..........................................................................................12
Micro‐Client Games .....................................................................................................14
Focus on Mobile...........................................................................................................16
Social Games Connects with Users ..............................................................................17
Games Market Forecasts .............................................................................................21
Drivers to Growth ........................................................................................................24
Inhibitors to Growth ....................................................................................................26
Top Online Games........................................................................................................28
Taomee Profile.............................................................................................................35
ZT Games......................................................................................................................42
Kunlun ..........................................................................................................................45
Joyport .........................................................................................................................46
Giant Interactive Group ...............................................................................................48
NetEase ........................................................................................................................ 62
NetDragon....................................................................................................................68
Shanda Games .............................................................................................................73
Changyou .....................................................................................................................81
Tencent ........................................................................................................................ 93
Perfect World.............................................................................................................101
Guangyu Huaxia .........................................................................................................109
Kingsoft ......................................................................................................................110
LineKong.....................................................................................................................114
KongZhong .................................................................................................................115
Renren........................................................................................................................122
Sina.............................................................................................................................129
Appendix: Socio‐Economic Overview, and Government Regulations.......................134
Internet Cafes.............................................................................................................135
Billing and Payment Methods....................................................................................138
Unique Characteristics of Online Games ...................................................................140
Online Games Marketing ...........................................................................................142
O Games Market in China – Sample. Please contact us to purchase. i

4. Sources of Game Content ..........................................................................................145
Co‐development ........................................................................................................145
Co‐operation ..............................................................................................................145
Licensing.....................................................................................................................146
Original Content.........................................................................................................146
New Game Development...........................................................................................147
Socio‐Economic Overview..........................................................................................148
Regional Differences ..................................................................................................148
One‐Child Policy .........................................................................................................149
Unique Characteristics of Chinese Society ................................................................150
Guanxi ........................................................................................................................151
Transparency and Corruption ....................................................................................151
Government Regulations ...........................................................................................152
Government Agencies Involved in Regulating Games...............................................154
Fatigue System...........................................................................................................156
Virtual Currency Regulations .....................................................................................157
Demographic profiles of gamers................................................................................160
O Games Market in China – Sample. Please contact us to purchase. ii

5. Table of Figures
Figure 1: Net Application Use Rate ........................................................................4
Figure 2: Percentage of Users Willing to Pay for Content......................................5
Figure 3: Online Games Market Forecast 2010‐2017 Graph, $m ..........................6
Figure 4: PC Market Share in China........................................................................7
Figure 5: Number of Internet Users in China .........................................................9
Figure 6: Age of Internet Users ............................................................................10
Figure 7: Top Web Games 2011 ...........................................................................12
Figure 8: Mobile Games Market Share.................................................................16
Figure 10: Top Games on Qzone and Penyou ......................................................18
Figure 9: Popular Themes fro Qzone games ........................................................19
Figure 11: Genres of Games on Tencent's Qzone ................................................20
Figure 12: Online Games Market Forecast 2010‐2017 Graph, $m ......................21
Figure 13: Online Games Market Forecast 2010‐2017 Data Table, $m ...............22
Figure 14: Internet Café........................................................................................25
Figure 15: CrossFire, one of many shooters on the market.................................27
Figure 16: Game Operators ACU and PCU ...........................................................28
Figure 17: Top Online Games Operators by Revenue 2011 .................................33
Figure 18: Game Operator Total Revenue Market Share 2011 ...........................34
Figure 19: Taomee’s virtual worlds and social network service ..........................36
Figure 20: Taomee’s Quarterly Corporate Net Income and Revenues ................37
Figure 21: Taomee’s Operation Metric (in millions) ............................................38
Figure 22: Taomee’s Yearly Corporate Net Income and Revenues......................42
Figure 23: Comparison of ZT Games ....................................................................52
Figure 24: Screenshots of ZT Online.....................................................................55
Figure 25: Giant Interactive Title Matrix ..............................................................58
Figure 26: Giant Interactive’s Quarterly Net Income and Revenues ...................59
Figure 27: Giant User Metrics (in 000s)................................................................60
Figure 28: NetEase Title Matrix ............................................................................63
Figure 29: Screenshots of Tianxia II......................................................................64
Figure 30: NetEase’s Corporate Net Income and Revenues ................................66
Figure 31: Screenshot of Conquer Online.............................................................68
Figure 32: NetDragon’s Game Metrics.................................................................69
Figure 33: Top Three Games by NetDragon .........................................................70
Figure 34: Screenshot of Eudemons Online .........................................................70
Figure 35: NetDragon’s Corporate Net Income and Revenues ($m) ...................72
Figure 36: Screenshot of Mir II .............................................................................74
Figure 37: Top Titles by Shanda............................................................................75
Figure 38: Shanda’s MMORPG and Casual Games...............................................77
Figure 39: Shanda’s Quarterly Corporate Net Income and Revenues .................78
Figure 40: Shanda’s Game Metrics (in millions)...................................................79
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6. Figure 41: Shanda’s Corporate Net Income and Revenues (in millions)..............80
Figure 42: Screenshots of TLBB ............................................................................84
Figure 43: Duke of Mount Deer............................................................................86
Figure 44: Advertising for Tianlong Babu .............................................................87
Figure 45: Blade Online Logo................................................................................88
Figure 46: Changyou Quarterly Financial Performance .......................................90
Figure 47: Changyou’s Game Metrics...................................................................91
Figure 48: Changyou Financial Performance (In $m, USD) ..................................92
Figure 49: Tencent PCU and ACU Metrics (in millions) ........................................95
Figure 50: Tencent’s Title Matrix..........................................................................97
Figure 51: Tencent’s Corporate Net Income and Revenues ($m)........................98
Figure 52: Screenshots of Zhu Xian ...................................................................103
Figure 53: Perfect World Fiscal Year Financials..................................................106
Figure 54: Perfect World ARPU, Average Concurrent Users and APA ...............107
Figure 55: Guangyu Huaxia’s games...................................................................109
Figure 56: Screenshot of JX Online 2 ..................................................................111
Figure 57: Kingsoft MMORPG Metrics ...............................................................111
Figure 58: KongZhong Quarterly Revenue .........................................................118
Figure 59: Kong Zhong Online Games Metrics ...................................................119
Figure 60: KongZhong Yearly Revenue...............................................................120
Figure 61: Sina’s Financials ................................................................................131
Figure 62: Location for online gaming (multiple‐choice) ...................................135
Figure 63: Age Difference Among Chinese Internet Cafe Users ........................136
Figure 64: Prepaid game cards ...........................................................................139
Figure 65: Characters from Shanda’s co‐developed titles .................................145
Figure 66: Map of China’s Provinces ..................................................................148
Figure 67: Summary of Regulations Governing Virtual Currencies....................157
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