Dynamic shift away from MMORPGs in China’s Online Games Market

Niko Partners, the leader in Asian Games Market Intelligence™, today released highlights from the company’sMid-year Analysis on China’s PC Online Games Market asserting that the emergence of demand for webgames (defined as hard-core browser based games, akin to those in the US by companies such as Kixeye and Kabam) has effectively increased the share of market revenue held by private game companies in China. Meanwhile the growth in online games services revenue of publicly traded online operators has slowed in relation to the overall market revenue. While the overall market grew 37% in 2012, the revenues of the large publicly traded online operators grew a slower, yet still respectable 26%. This could be because most of the public companies have line ups dominated by MMORPGs, whereas faster growth is coming from the other online games segments.

The exception is Tencent, whose advanced casual games (including MMOFPS and MOBA games) dominate the Top 5 in that segment. Tencent’s dominance in advanced casual games with titles such as League of Legends and Cross Firehas catapulted the company to take roughly half of the market share for PC online games in mainland China. Companies hoping to be competitive in China’s market should review Niko’s Monthly I-café Games Data as well as our market research studies to understand the dynamics in the market.

“For several years Niko has cautioned that the repetitive theme of cultural mythical history MMORPGs in China was beginning to bore gamers, and that new types of games would be necessary to revive waning demand for those games,” said Lisa Cosmas Hanson, managing partner of Niko Partners. “Now we can see from the data that it is a demand driven market and gamers, particularly those in their teens and twenties, are eager to try newer themes.” Niko’s senior analyst Kevin Hause added “In addition, Niko has witnessed that demand for mobile games has disrupted PC online games growth, particularly within the segments of casual and social games.”

Niko’s analysis comes from the company’s Monthly Chinese Internet Café Games Data service, ongoing Shanghai-based local research, and a review of the publicly traded companies’ financial statements from Q1 and Q2 2012. Niko offers market research for every budget by way of individual reports, consulting at an hourly rate, an annual subscription of 10 deliverables in the2012 China Games MarketResearch, and the Monthly I-café Games Dataservice. The August deliverable in the annual subscription was Niko’s Mid-Year 2012 Internet Café Games Usage Data Analysis, which is an excellent companion to the monthly I-café games data. In September we will publishNiko’s Location of Gameplay and Gaming Hardware Report.