Asia is currently the largest source of online gaming revenue in the World, with 50% of all revenue collected from the region. The USA accounts for 30% with the remaining 20% coming from Europe. While Asian territories like Hong Kong, South Korea and Japan represent large gaming communities, percentage wise, it is unsurprising that China has become the largest market in the world for online users. Even though only around 20% of the country's population is currently connected, that still adds up to a staggering 253 million users. As one might expect it is the younger generations who have adopted the new technology most readily, with 68.6% of China's internet users aged 30 or under. The over-40s demographic make up just over 10% of total internet users in China. While the primary reasons for logging on are instant messaging and downloading music and videos, 59.3% of all internet users in China do so to take part in online gaming. That is a target market of around 150 million people for anybody involved in the industry. That figure is only likely to increase in the future as more and more people begin to see the advantages of living your life in cyberspace.

MMORPGs for all

Industry observers have estimated that from 2007 to 2010, the online gaming industry in China is expected to grow by at least 30%, and some say that figure is conservative. Of course, the primary beneficiaries of this market are the game developers and operators themselves, particularly those who have brought successful Massively Multiplayer Online Role Playing Games ("MMORPGs") to the region. One of the most famous success stories is that of World of Warcraft ("WoW"), a fantasy sword and sorcerer style game in which players create a character for themselves, and try to complete tasks in order to earn gold or precious stones. These riches can in turn be traded for weapons, armour or other supplies to improve and advance their character through the game.

In most countries, access to games such as WoW is gained by paying a monthly subscription fee. However, many Chinese players do not own their own computer and access the game from internet cafes, coffee shops and other such communal terminals. Therefore, they pay their fees by buying pre-paid game cards (much like phone cards) which give them a specified amount of playing time. The9, the licensee of WoW in China, reported that within the first month of the games' release, more than 1.5 million paying Chinese customers had signed up.

Money for nothing?

Beyond the simple pleasure of playing MMORPGs for fun, an increasing number of game-savvy entrepreneurs have spotted and begun to implement business possibilities within these online worlds to make real money. Increasingly, characters, weapons, spells and other in-game accoutrements are finding their way on to auction sites such as eBay, where aspiring players looking for a quick leg-up in the game world are happy to part with hard earned money in return for these cyber accessories. Where there is demand, there must be supply and in a number of emerging markets, including China, players are being deployed into online games with the specific purpose of collecting gold, platinum and other precious items to exchange for real cash. Amongst gamers this tactic of playing has been dubbed 'gold farming', and is proving big business for those dedicated enough. Players go into the game world, not to play the game conventionally, but to find the quickest and easiest method of earning gold pieces, which can then be sold on for real money.

More recently, Chinese companies developing and operating their own games have met with increased interest and popularity, rather than simply licensing already established titles from other markets. In fact, the domestic gaming market is booming so much that stock market analysts are beginning to take investment in these companies seriously. Provided the management of a company has a clear vision of what they want to do and is committed to developing good games, has strong R&D capabilities and a shrewd marketing approach to differentiate their games from competitors in the market, then an investment can prove very profitable.

Virtually limitless possibilities

Another area of online gaming that is experiencing a massive boom is the concept of Virtual Worlds. Taking the same basic experience as in MMORPGs, Virtual Worlds, such as Second Life or Entropia Universe attempt to move away from the "game" angle and promote a more all inclusive parallel living experience. As with WoW, participants, known as 'residents' before setting foot in the virtual world. Once in-world, residents can basically do anything - buy property, go to a nightclub, write for a newspaper, or open a hair salon.

While Second Life is currently unavailable to Chinese gamers as some of the services available in-world, such as gambling and access to adult content, run contrary to current internet guidelines, a number of domestic companies have been quick to design alternatives. HiPiHi is the largest Chinese version currently available, going live in April this year and currently host to some 50,000 residents. Like Second Life, there are myriad advertising opportunities available to real world companies, with amenities such as banks, stores and billboards to be populated, allowing customers the chance to do more of their real shopping, banking etc. without needing to leave their virtual environment.

Entropia Universe has recently struck a deal with Cyber Recreation Development Corporation ("CRD"), Beijing Municipal People's Government's supported online entertainment company, to bring a cash based virtual economy to the Chinese public. How Entropia differs from other virtual worlds such as Second Life, is that PEDs, the currency used in-world, can be converted into real money, at a fixed exchange rate of 10 PED = US$1. The new deal will expand the Entropia Universe from one planet to hundreds as it prepares to be colonized potentially by hundreds of millions of new residents. The Beijing Municipal People's Government hopes that by combining digital entertainment with recreation facilities, CRD will bring out new opportunities for the traditional economy and will stimulate new enterprises throughout the region.