China Online Games To Top $11 Billion By 2012

There's room for the burgeoning online game business in China to grow -- and it's set to do so quite rapidly, as internet adoption is expected to skyrocket in the next few years, to reach 73.1 billion yuan ($10.7 billion) by 2012. Industry revenues are projected to reach 26 billion yuan ($3.8 billion) this year and grow by an average of 41.2 percent over the next three years, said Beijing-based research firm Analysys International. There are currently 69 million online gamers active in the region, according to a Reuters report on the research -- but internet penetration is only at about 27 percent of the total population. In South Korea and Japan, by comparison, internet penetration is 70 percent. This means that by 2012, there will be 230 million Chinese playing games online, thanks to rapid internet growth expected in the next three years. The unanswered question is how much of an obstacle to growth Chinese regulators -- currently in something of a power struggle amongst themselves -- will be. Just recently, Blizzard's World of Warcraft hit regulatory snags on its way to relaunching following a transition to operator NetEase. In the second quarter of this year, China's online game revenues grew 39.5 percent year-on-year to $906 million. Online operator Tencent Holdings leads in the region, followed by rivals Shanda and NetEase.