Fighting For the Chinese Gaming Market

bart_scriv writes "While lots of ink is being spilled on the Wii/PS3 war, the real battleground for gamers may be in China, where companies Shanda and Netease are fighting for supremacy in the world's largest potential gaming market. The article looks at the companies' dramatically different business models (traditional subscriptions vs. virtual item sales), and offers screen caps of the companies' most popular online games: 'China is even expected to surpass tech-happy South Korea next year as Asia's biggest gaming market. China's overall Internet user base is enormous — about 120 million this year and growing fast. Yet it's a business in flux, and there is a huge debate among companies in this arena about whether to stick to a subscription fee model or go with a free-to-play one to build up a huge online consumer base. The lost revenues would be more than made up by sale of virtual goods (such as ammo for avatars, and so on) and also music and online movies to the legions of gaming fans attracted to its site — or so the theory goes.'"

Re:Doesn't China just pirate stuff?

[RobertinXinyang]

I live in China. First off, 50 cents an hour is not considered good pay. A teacher will make anywhere from 800 to 1500 RMB per month. 1 RMB =~ 7.97 USD. That having been said, I regularly see PC games for sale between 10 and 12 RMB. This is not just in some covert shops, this is in major supermarkets. It is widly recognized that the software is pirated. However, that dos show the price that people are willing to pay

I tend to feel that the software pirating issue will never be solved here untill something is done about DVD regional encoding. If you purchase a ligitimate DVD (and I have many) it is a real toss-up if you will be able to play it due to regional encoding (what plays on my laptop may not play in my classroom, or on a friends DVD player). However, if I purchase a pirate copy, that has the region codes removed, it will play where ever I want to play it. The need for DVDs' to be pirate copies in order to be sure that they will play is keeping the entire counterfit media culture afloat.

Solve the DVD problem and there may eventually be a market for software (so long as it is pricesd in the market [what people are able and willing to pay]). Untill the DVD problem is solved, the market place for counterfit media will continue to thrive and siftware will be available in that market.

Re:Doesn't China just pirate stuff?

[Sj0]

If this site is correct [maine.edu] then you've got your exchange rate backwards, and a teacher makes about 189 US dollars per month. That's not very much...

Re:Doesn't China just pirate stuff?

[Sj0]

Not by much. Assuming 5 day workweek at 8 hours a day, that works out to about 22 days work in a month, works out to about 8.60USD per day, or 1.02/hr.

And that's for a teacher, who is educated. If china is like most places, you can do a lot worse than being a teacher.

As long as we're tossing around numbers...

[FooAtWFU]

As long as we're throwing around figures and numbers and such... The World Bank's World Development Indicators 2005 estimates that one United States dollar was equivalent to approximately 1.8 Chinese yuan in terms of "purchasing power parity". So, that figure of 800 RMB/mo (to take the low estimate) is about equivalent to $222/mo in terms of what sort of Stuff you can actually buy with it. Of course, that means that also means that $10 =~ 78.65800 RMB is about equivalent to $43.70 in terms of what you'd need to give up to get it.

You may continue to draw conclusions. One thing this says to me is that it's looking a lot rosier for a Chinese company looking to get rich quick by selling stuff to Americans than vice-versa... or even for a Chinese company to sell stuff to Chinese... eh.

Re:Pretty much..

[FooAtWFU]

Purchasing power parity compares the amount of money it takes to buy (purchasing) a certain basket of the same goods (parity) in two different countries. It's useful when comparing relative incomes across countries. You often hear about how in such-and-such country many people only make something like $1 an hour - but you don't hear as often how much further a dollar goes there. In such places, you can usually get goods and services (like food and housing) for mere pennies on the dollar compared to what you can find in the United States. Mind you, most people in these circumstances are admittedly still rather poor- just not nearly as abysmally poor as you might otherwise think.

The details of the calculation are best left to people more skilled in the art of economics than you or I. You can read about it on Wikipedia [wikipedia.org].