Tuesday, May 11, 2010

China's online game market goes boom boom, bust?

Like many industries that didn’t exist in China till no more than a dozen years ago, online PC gaming has been growing pretty darn fast. However, the 30% growth cited in that article actually represents a slower growth rate than just a few years ago, when it was at 60-70%.   One online gaming company, Changyou, saw 17% growth in its Q1 sales this year, but that’s actually one of the smallest quarterly year-on-year growths they’ve ever experienced. Considering that one such period saw 1000%+ growth, it’s not all that surprising that things have slowed down.

So investors see slowing growth, get scared, and stock prices begin to fall. I suppose it is inevitable that some investors would pull out, the ones who were only in it for the short term anyway, but still, WTF? How is 17% growth in anyway a sign that the so-called bubble is bursting on China’s online gaming market? If anything it sounds more like the market is maturing rapidly and that the industry is settling in for more stable long-term growth. Of course it will intensely competitive as any industry is in China where the number of gamers will be exponentially larger than most other markets, but that’s really only going to be good for the gamers.

The game industry as a whole will continue to grow dramatically in the next five years simply because the numbers of gamers are increasing. There’s like some 400 million people online in China nowadays, 93 million expected to be gaming by the end of this year, and 100 million more in the next few years. I am not a fan of predictions and estimates, but looking at the history of growth in China’s online population tells us that the same thing could very easily happen in gaming. So what’s all the worry about? What’s wrong with slower growth? Seems to me the business is still booming

Posted via email from 电玩杀瓜 - a game blog

No comments: