23 Nov 2010 11:28

China's gaming industry lusts for overseas markets

Beijing. November 22. INTERFAX-CHINA - China's gaming industry is eager to tap into overseas markets, Interfax learnt at 2010 China Games Developers Award show on Nov. 19.

Zhang Yuyu, co-founder and chief technology officer (CTO) of online gaming firm Linekong Entertainment Technology Co. Ltd (Linekong), told Interfax during the award show that his company is exploring potential overseas income streams.

"Linekong's recently developed games, like Journey to the West and Mercenary World, have secured licensing agreements with games distributors in Southeast Asia, North America and North Europe," Zhang noted.

Overseas licensing agreements may generate revenue in excess of $10 million in 2010 for Linekong, said Linekong CEO Wang Feng at a previous industry event. This would account for more than a third of the company's total revenue, Feng noted.

Yu Yi, an analyst with research firm Analysys International, told Interfax on Nov. 23 that China's game exports will exceed $150.48 million in 2010, compared to $55 million and $109 million in 2008 and 2009 respectively.

Due to shared culture aspects, Southeast Asia is currently the main export destination for Chinese games, but North America, Europe and Russia have emerged as key markets in recent years, Yu said, adding that the overseas market for Chinese games will continue to grow as quality and content improves and as domestic competition intensifies.

Challenges remain. Nasdaq-listed Perfect World Co. Ltd., a Beijing-based online game developer and operator, said in its unaudited third quarter results on Nov. 15 that it earned $7.3 million from licensing games to overseas distributors, $1.3 million less than the same period in 2009.

China's game developers should localize games and increase research and development to satisfy demand from overseas markets, Yu noted.

China has seen a greater number of domestically developed games in recent years. More than half of the 244 competing games at the 2010 Golden Plume Awards on Nov. 3 were made in China.

Held at the China Digital Entertainment Expo Conference (ChinaJoy), the event was intended to showcase China's games to overseas distributors and industry players.

- Li Xin