CHINA S PC ONLINE GAMES MARKET REPORT MARKET SIZE, 5- YEAR FORECAST, & ANALYSIS April 2013 The 2 nd report in Niko s 2013 market research subscription
ABOUT NIKO PARTNERS Our Focus Niko Partners specializes in market research about China s games industry. Since 2003, we have published industry-leading syndicated reports and custom research studies using primary research about the PC online, PC offline, console, and handheld segments of the Chinese gaming market. In 2010 we added coverage of the games markets in Southeast Asia including the countries of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Our staff in Silicon Valley and Shanghai directs, collects, and analyzes the data and prepares the reports. Our Mission and Services Niko Partners mission is to help game software, hardware, services, and investment companies, and regulators, understand the market, strategically enter or expand market share, select the best partners, and continue to profitably grow within China and Southeast Asia. We support our mission through our state-of-the-practice market research reports and a host of related services: Our Team Market-entry strategy development and consultation Partner introductions and selection assistance Focus groups Custom surveys to people from a database of 1.8 million Chinese consumers Market opportunity analysis using custom research Lisa Cosmas Hanson, founder of Niko Partners, leads the team of analysts, researchers, and consultants and manages operations in the US and China. Kevin Hause and Xiaofeng Zeng were major contributors to this report. The US-based Niko team consists of professional analysts and consultants in Silicon Valley who collaborate on all research methodologies and quantitative and qualitative analysis. The Chinabased team is located in Shanghai and consists of experienced analysts and market research professionals. They manage the China-based researchers and local surveys, interviews and focus groups. Our Clients We serve worldwide industry leaders in game software, hardware, and services, as well as hedge funds, media companies, trade associations, and management consulting firms, all of whom have a vested interest in a thorough understanding of the Asian games industry. 1 Niko Partners 2013 www.nikopartners.com
Table of Contents About Niko Partners... 1 Our Focus... 1 Our Mission and Services... 1 Our Team... 1 Our Clients... 1 2013 China Market Research Subscription Deliverables... 4 Glossary of terms... 5 Methodology... 6 Executive Summary... 7 Economic Assumptions... 8 Online Games Market overview... 9 Important Note on Niko s Change in Game Segmentation for our Model... 11 Five-year forecast 2013-2017e... 13 Game Spending Forecast... 20 Online Games Market Trends by Segment... 24 Massively Multiplayer Online Games (MMOGs)... 24 MMORPGs... 24 MMO Non-RPGs... 25 SNS / Casual / Weibo... 27 Webgames... 29 Game consoles... 30 Gamers... 32 Online Game Operators... 34 Overseas Expansion Efforts... 35 Highlights of selected publicly traded online game operators... 35 ChangYou.com... 35 Giant... 35 Kingsoft... 35 KongZhong... 35 NetDragon Websoft... 36 NetEase... 36 Perfect World... 36 Qihoo360... 36 Shanda Games... 36 Taomee... 36 Tencent... 36 The9... 37 Trends in Game Licensing... 38 Regulations... 38 Future Thoughts... 39 2 Niko Partners 2013 www.nikopartners.com
Table of Exhibits Exhibit 1: Population, Internet Penetration, Broadband and Online Games... 10 Exhibit 2: Evolution of Segment Names as Defined by Niko Partners... 11 Exhibit 3: Comparative restated market segment names for our 2011 data... 12 Exhibit 4: Historical Chinese Game Market Size (2001 2012)... 13 Exhibit 5: China Online Gamers and Revenues Forecast, 2011 2017e... 14 Exhibit 6: China s Game Revenues Forecast, 2011-2017e... 15 Exhibit 7: China s Game Revenues by Game Category, 2011-2017e... 15 Exhibit 8: China s Game Revenues by Game Category, 2011-2017e... 16 Exhibit 9: Top 10 I-café Games, based on Number of Launches, March 2013... 17 Exhibit 10: Key Anticipated Games for 2013 (repeated from Niko s February Trends Bulletin)... 17 Exhibit 11: Monthly Spending by Gamers on Online Games, by Gamer Type... 21 Exhibit 12: Average Annual Spending per Gamer (all gamers), 2011 2017e... 22 Exhibit 13: APA and ARPU for Selected Online Game Operators... 22 Exhibit 14: ACU and PCU for Selected Online Game Operators... 23 Exhibit 15: Ratio of FPS and TPS to all Online Games Played in I-cafés Jan-March 2013... 24 Exhibit 16: Top 10 MMORPGs for 2012 based on Average Concurrent Users... 25 Exhibit 17: Top 5 MMORPGs based on Hours Played in Niko s Monthly I-Café Games Usage Data, March 2013... 25 Exhibit 18: Top 10 MMO non-rpgs for 2012 based on Average Concurrent Users... 26 Exhibit 19: Top 5 MMO non-rpgs based on Hours Played in Niko s Monthly I-Café Games Usage Data, March 2013... 27 Exhibit 20: Top 10 Casual Games for 2012 based on Total Usage... 28 Exhibit 21: Top Ranked SNS website usage by Hours based on Niko s I-Café Games Usage Data, March 2013... 28 Exhibit 22: Top Ranked Webgames by Hours Played, March 2012 (I café tracker data)... 30 Exhibit 23: Percent of Time Spent Playing Games, by Game Category, March 2013... 33 Exhibit 24: Hours per Week Spent Playing Games, All Gamers, March 2013... 33 Exhibit 25: Selected Online Game Operator Service Revenues and Key Titles... 34 Exhibit 26: Market Capitalization of Publicly Traded Online Game Operators... 37 3 Niko Partners 2013 www.nikopartners.com
2013 CHINA MARKET RESEARCH SUBSCRIPTION DELIVERABLES February: Chinese Games Market Trends Bulletin April: China s PC Online Games Market Report June: China s Mobile Games Market Report August: Location of Gameplay and Gaming Hardware Report September: China s Online Games Market Six-Month Update Bulletin October: Chinese Gamers Report (Tiers 1/2/3/4) November: Southeast Asian Games Market Regional Report (optional add-on) December: 2013 Year in Review Presentation (on-site, upon request) Ongoing data services: Monthly Internet Café Games & SNS Rankings Data from Tiers 1/2/3/4, and Quarterly Home Gamers Data from Tiers 1/2/3/4 Custom research: upon request Analyst inquiry time: as needed 4 Niko Partners 2013 www.nikopartners.com