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Chinese Online Gaming, Increase in Internet Access, User Diversity Helping Chinese Online Gaming Market Blossom

By Rachel Metz, AP Business Writer

NEW YORK (AP) -- Fueled by rising Internet access and an increasingly diverse user base, the Chinese online gaming market is booming, and analysts think steady growth will keep it healthy for years to come.

About 43 million to 45 million people currently play multiplayer online games in China, said Pali Capital analyst Tian X. Hou.

These make up the vast majority of China's online gaming space, while casual games, which are more individual-focused and simpler, make up the rest.

Revenue from online multiplayer games has grown over 25 percent annually in the past few years, Hou said, and the games are on track to bring in $1 billion in China this year.

Andrey Glukhov, an analyst with Brean Murray Carret & Co., thinks China's total online gaming market could grow to about $2 billion by 2010.

"The established players in this market generate very, very, very nice cash flows," Glukhov said.

Companies -- some of whom license and run games, some of whom develop and run their own, and some of whom do all three -- are also betting growth will continue. Since July, Chinese online gaming companies Perfect World Co. Ltd. and Giant Interactive Group Inc. have joined a swelling crop of companies like The9 Ltd. and Netease.com Inc. that are trading publicly in the U.S.

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According to the latest NPD report, 63 percent of the U.S. now plays video games and most prefer to play as a family or as a group.

The NPD Group's new report, Expanding the Games Market, has taken a look at the various gaming attitudes among different gamer demographics. The online survey, which polled over 5,000 members of NPD's online consumer panel in October, found that heavier gamers are more inclined to play alone, but both heavy and light gamers "are equally inclined to enjoy playing games as a family, group or as a party activity, and both groups value gaming as a way to bring their families closer together." Most gamers ages 15-65 also cited stress relief as an important reason to play.

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Go NYC! Silicon Alley Insider is great

I'm happy to see that NewYork is coming back on the tech scene..

Silicon Alley Insider (in beta) has even come back and after reading it for quite some time now, I really can say I love it! Read it too...

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How Will Activision Blizzard Change Games Sector?

A very good analysis form Om Malik

It’s not entirely clear yet how Vivendi’s plan to take a controlling stake in Activision, unveiled Sunday, will shake up the games industry. But the $18.9 billion deal will not only merge the maker of World of Warcraft with the owner of Guitar Hero, but will create a video game company, Activision Blizzard, that surpasses Electronic Arts in terms of revenue.

It certainly gives EA (ERTS) something to think about, and some analysts are wondering if EA will look for a buyout from a large media company. What’s more likely is that EA will look for other acquisitions. Raph Koster, who started a company that bridges the web with virtual worlds, notes that EA seems to be moving towards global media concerns while Activision (ATVI) has been “doubling down on traditional gaming.” It will be interesting to see if EA starts eyeing music, TV, film, and other entertainment options.

Also affected is The9 (NCTY), which operates World of Warcraft for Blizzard in China. Shares of the Chinese gaming operator, in which EA holds a 15 percent stake, slumped in Monday trading as analysts worried that the deal may delay contract renewal negotiations next year.

Activision CEO Kotick said in one interview that he’s counting on Blizzard’s strength overseas to help carry other Activision brands — such as Guitar Hero — to Asia. Blizzard is also working on Starcraft II, a brand that remains very popular in South Korea.

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10 rules to launch a startup today

From Loic Lemeur

1- do not wait for a revolutionary idea, the idea of your life will never happen, just focus on a simple exciting empty space you see and execute as fast as possible

2- share your idea as much as possible, the more you share, the more you get advice and the more you learn. Meet and talk to your competitors.
3- build a community around you through blogging and social software
4- listen to your community, answer questions and build your product with their feedback, involve bloggers as early as possible and get their feedback, if negative, adapt your product permanently
5- gather a great team with a very different skill set than yours, look for people who are better than you without being afraid of it
6- be the first to recognize a problem or a mistake you have made. Never hide it behind the carpet. Address the issue in public, learn and correct it.
7- do not spend time on market research, but launch as early as possible in alpha or beta versions. Keep improving the product in the open.
8- do not focus on a large spreadsheet business plan, you are so sure it is not going to happen anyway
9- do not plan huge marketing, growing with your community loving the product is much more powerful
10- do not focus on getting rich or selling your company, focus on your users, money is a consequence of success, can't be a goal

Sony Invests In Community Site Gaia Online; Signs Up For Virtual Movie Screenings

From Paid Content

Gaia Interactive, a San Jose, CA-based virtual space "hangout" geared towards young people, using avatars, has received an undisclosed amount of investment from Sony (NYSE: SNE) Pictures. The company is also tying up with with Sony and Warner Bros. to stream movies and TV shows inside of virtual theaters online created on its service, reports Variety.

Both studios will provide movies and TV shows as ad-supported and premium. PPV films will cost $1.99 each to watch. Gaia's 2.5 million members will be able to put their avatars inside the virtual theaters where the content will be playing, the story says.

THR: Sony and Warner will each deliver 50 library titles to Gaia, including "Spider-Man," "Ghost Rider," "Batman Returns" and "Ace Ventura: Pet Detective." Sony will eventually supply other programming as well, drawn from TV-derived content channels it has designated for digital platforms, including the Minisode Network, a collection of condensed episodes from Sony's television library.