Business Channel 2007-09-23&09-25, 中国盛放的网游产业

China has its problems: faulty products , tyres, seafood 1, dog food, toys with lead.But it’s also potentially a giant market for American companies. It’s China Rising. And it’s only on CNBC. Tonight, Melissa Lee On the Money Inside China’s giant online gaming industry which has more players than the US has people.

Harold Zhang doesn’t consider himself an online gaming addict 2 even though the Beijing lawyer spends about two hours a day online, four hours a day on weekends. He says he loses sleep to gaming and has even lost girlfriends.

For me, if you don’t let me play starting tomorrow, it feels like something from my life is missing.

Zhang is one of millions in china who switch off real life to go online instead to play what’s known as massively multiplayer online role-playing games.

Playing games is the same as every other kind of entertainment, like going to a movie or playing badminton. And that makes online gaming a burgeoning 3 business in China where research from IDC says revenues will double by 2010. Many companies like Shanda Interactive 4 give away access to the games, but charge for items that help players rack up points. Shanda also expects to add in-game advertising 5 next year.

Its president Tang Jun says making money is all about the numbers.

The business is about the volume, and especially in china, you know the volume is so high. And we have 20 million active users and we have over 300 million registered accounts. You know, and I am sure some of them spend less time or more time, spend more money or less money but if you combine them together, that’s phenomenal.

On average, gamers spend about 2 to 3 hours online per day and surprisingly most of these gamers are adults with the disposable income to spend. Active players on average spend 59 RMB per month, bringing the total market to 816 million dollars last year.

But what is so profitable has become a social problem. Last month, the government mandated 6 that games have monitoring software;that warn under-18 gamers to exercise at the 3-hour mark. At 5 hours, it’s game over. When a warning isn’t enough, the next stop may be here, the Internet Addiction 7 Clinic in Beijing where patients, typically teens, come to be cured at a steep cost of 40 US dollars a day through medication, and military-like training.

Those bad behaviors some could be corrected when people get older. A lot people don’t get treatment and they drop out of school or develop psychological illnesses and they get end up in jail. It could ruin their lives.

Only 10% of gamers are under 18, many more are like Harold Zhang, who thinks his hobby could turn into a habit.

I worry about it every single day.

Just one customer of 300 million and counting. On the Money, Melissa Lee CNBC, Beijing.

Notes:

rack up: To accumulate or score