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CGDC: Chinese Online Game Companies Eyeing Overseas Expansion

An increasing number of Chinese online game companies have been actively flocking overseas in recent years, by either exporting their titles or starting local operations, and more companies will follow the trend in the near term, thanks to a favorable policy.

Various evidences indicated that the Chinese government is enhancing its attention on the emerging high-tech online game industry, and is committed to supporting the domestic game companies for notable performance on both the domestic and international stages. From the beginning of this year, Chinese online game companies listed in the United States have all witnessed a decline in their stock prices, and two of them have seen slumps. Shanda has lost 14 percent of its stock price, and Perfect World’s shares have shrunk 13.6 percent in value. Another online game company has seen a 9 percent decrease since January. In addition, CYOU’s stock price has dropped 2 percent due to worse-than-expected Q1 results announced on April 27.

China is in an inferior position in comparison with Japan and the Western countries in terms of game development. Meanwhile, due to the dangling piracy problems, the development of single-player games and PC games continue to decline. And the country has been overtaken by South Korea in the development of online games.

However, with government supports and the release of industry regulations and favorable policies in recent years, the game industry is ushering in a golden age of rapid growth in China. The General Administration of Press and Publication of PRC invited a large number of overseas game experts and developers to give speeches at this year’s ChinaJoy and CGDC, and created Gaming China, a platform for Chinese game export, in partnership with MMOsite, a major overseas online game portal website.

Atul Bagga, analyst with Thinkequity, pointed out that the rapid growth of China’s online game industry has been proven as bubbles. He said, “The annual growth rate of China’s online game industry was between 60 percent and 70 percent several years ago, however, the Law of Large Numbers has manifested itself in the market, and the market’s growth rate will drop to between 20 percent and 30 percent.”

Therefore, at this particular moment, the Chinese government is encouraging the online game companies to expand their overseas market to relieve the highly competitive domestic market resulted from homogenization. On the other hand, the Chinese companies also need to be tested the international market under the WTO rules.

About CGDC
China Game Developers Conference (CGDC) is one of the world’s leading game development conferences. Each year, CGDC attracts over 3,000 professionals in the game development field to attend and learn. Over 70 global top-notch game designers and developers deliver speeches there and share their experience in the 3-day event.
http://en.chinagdc.com.cn/

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