The China Angle: 'China Vice'

The latest edition of Gamasutra's regular 'The China Angle' column has Pacific Epoch's Shang Koo taking a look at virtual currency in Chinese games, Zhengtu Online's rise to power, and Guild Wars' Chinese launch. Currency Crossing Borders IM/game company Tencent's QQ coin virtual currency has come under scrutiny in recent weeks after the Chinese government finally took notice of virtual currencies. Tencent's QQ instant messaging platform has over 220 million active users, concentrated in China's college and high school age population. Instead of charging subscription fees, Tencent has mastered the art of micro payments with its QQ coin system. A pair of virtual Nike sneakers might only cost a few QQ coins, but a whole outfit, plus a virtual sports car, can add up to over a hundred coins. As Tencent has steadfastly pegged QQ coins on a one to one basis to the Chinese Yuan, QQ coins has become the gold standard for online currencies in China. For smaller online transactions, more Internet users are willing or able to take QQ coins as payment than commonly used online payment tools like Alibaba's Alipay, 99Bill, or Paypal. Unlike the payment tools, which need to be tied to a bank account for withdrawals, QQ coins can be spent immediately. Even major Internet entities like Chinese portal Sohu has started allowing users to recharge their MMORPG accounts using QQ coins. According to some local media reports, QQ coin circulation has become significant enough to be affecting the Chinese real life money market, and China's version of the Federal Reserve Bank is already investigating the QQ issue. Tencent need not worry about China's Fed yet, but the company needs to be wary of China's Ministry of Culture. Virtual currency allows Chinese Internet users to circumvent (or at least enter a not completely black area under) China's anti-gambling laws. Gambling has been outlawed in China for more than 50 years, but remains one of the major vices among the general population. According an unnamed expert on Tianjin based portal Enorth.com.cn, Tencent's casual game platform and game currency are used for applications that violate the anti-gambling laws. Tencent's platform QQ Games is the largest casual game platform in China, with over 3 million concurrent users at peak times. Games on the platform range from generic Tetris clones to Mahjong and card games. All games are free, but gamers have the option to play for game coins for some skill games. Tencent takes a 10 percent cut from the bets. Sex Sells Still on the topic of vices, Chinese online game portal 17173 has released the latest weekly ranking of the most anticipated online games in China. Guangdong based Optisp took home the honors with its licensed MMORPG Shaiya. Recently, the game has been in the spotlight after a blogger complained that Shaiya's 30 second ad contains a large amount of sex and violence. The ad was made for the Korean market and was edited before entering China. The game starts closed beta testing on November 10 and has consistently ranked third in previous rankings. Zhengtu Not For Kids Zhengtu Games' MMORPG Zhengtu Online continues to gain users. The game recorded 645,000 peak concurrent users on October 28, around the same level as World of Warcraft in China. User growth for the game, which was launched early this year, has been the fastest ever for any game in China, and has caught the attention of several groups. China Youth Association for Network Development (CYAND) rated Zhengtu as a dangerous game in September, followed by The First Green Online Game Judgement in October. Both claimed the game was overly addictive. Neither is likely to convince Zhengtu's maker to tone down the game, as the two organizations are all non-government in origin and have no real power. According to Zhengtu Games' president Shi Yuzhu, the company hopes minors will stay away from Zhengtu Online and game masters will kick out any underage gamers from the game. The9 Prepares For Guild Wars China's World of Warcraft operator The9 is in the final stages of preparation for its licensed game Guild Wars. The game is expected to start closed beta testing in late November, with open beta following in December and commercial operations starting around Chinese New Year in February. The9 recently signed Shanghai Media Group (SMG) as a partner for Guild Wars promotion. SMG's IPTV game channel GamesTV will include Guild Wars content in the shows and create a special channel on GamesTV's website. Computer and console game related content are banned from conventional airwaves, leaving Internet as the only source for game related video broadcasts. According to a rumor reported by China Business News, The9 is also in talks with Pepsi for Guild Wars promotion. The9 already works with Coca Cola, who is the global soft drink partner for World of Warcraft. Pepsi worked with Shanda Entertainment in mid 2005, when Shanda launched its MMORPG Magical Land around the same time as The9's launch of World of Warcraft. [Shang Koo is an editor at Shanghai-based Pacific Epoch, and oversees research and daily news content on China's new media industries, with a concentration in online games. Pacific Epoch itself provides investment and trade news and publishes a number of subscription products regarding the Chinese technology market.]