Tencent Leads China's $906 Million Q2 Online Game Market

In the second quarter of this year, China's online game revenues grew 39.5 percent year-on-year to $906 million, with online operator Tencent Holdings leading the charge ahead of competitors Shanda and World of Warcraft operator NetEase. A Reuters report cited data from Analysys International, which said Tencent captured 20 percent of the overall Chinese online gaming market during the quarter. In addition to operating online games including Xunxian, Dungeon & Fighter, and QQ Huaxia, Tencent operates an instant messaging service, and other online businesses. Shanda Games, which held an IPO in September, captured 20 percent of the market, operating games in the region such as Dungeons & Dragons Online, Ragnorok Online, and Company of Heroes Online. NetEase, which took over the operating rights to Blizzard's World of Warcraft from competing Chinese online game operator The9, made up 12.7 percent of the market during the quarter, according to the report. The transition of WoW from The9 to NetEase was delayed amid regulatory issues with the Chinese government, leaving millions of Chinese WoW subscribers in the dark for weeks during this past summer. Earlier this week, China's General Administration of Press and Publication and its National Copyright Administration re-iterated and strengthened their regulatory powers over online games operated out of China, requiring pre-approval before any game can be launched, and completely forbidding any foreign investment in Chinese operators of online games. An August report from San Jose-based Niko Partners forecast that there will be 65 million online gamers in China by year-end.