The China Angle: Two IPOs And A Licensing Deal

In Gamasutra's latest China Angle column, Pacific Epoch's Shang Koo looks at two MMO operators - 9you and Perfect World - seeking new legitimacy with overseas stock market listings, and looks at the future for Shanda and Tecmo's recently announced Dead or Alive Online. Summer Graduation After more than two years of inactivity, China's online game industry will send two more companies overseas for stock listing. Shanghai based Nineyou (9you), the operator of popular online music game Audition, will list in Osaka on July 12. Beijing based MMORPG developer and operator Perfect World will list on Nasdaq on July 23. Many Chinese companies have used overseas listing as a form of marketing. After Chinese search engine Baidu listed on Nasdaq in August 2005, the company saw a boost in user traffic and sales, as the listing gave Baidu a new sense of legitimacy. 9you is already a household name. The online music game operator is the first online game company to purchase name sponsor rights to popular TV programs. In April 2006, 9you signed with China's second largest TV conglomerate Shanghai Media Group (SMG) to sponsor SMG's popular show Dancing With The Stars, a dance show copied from the popular American show of the same name. 9you also sponsors a nightly entertainment news program from SMG subsidiary Dragon TV. With the help of the TV programs, 9you has recorded over 900,000 peak concurrent users (PCU) for all of its music games combined, including 780,000 PCU for its bread and butter game Audition. Like 9you, Perfect World also has ties to TV programming. The company's current cash cow game is in-house developed MMORPG Legend of Martial Arts (Wu Lin Wai Zhuan). The game is based on the phenomenally popular historical costume sit-com of the same name. The game has recorded over 500,000 peak concurrent users. Along with Legend of Martial Arts, Perfect World also operates popular in-house developed MMORPGs Perfect World and Zhu Xian Online. With three successful in-house developed MMORPGs under its belt, Perfect World has the best track record for game development among Chinese online game operators. Nevertheless, Perfect World has not become overconfident and is ramping up efforts to license games from overseas. Shanda Thickens Pipeline Chinese online game pioneer Shanda is making another gamble. The company that introduced MMORPGs and advanced casual games to China has licensed online fighting game Dead or Alive Online (DOA Online) from Japan’s TEMCO. The game is slated for launch in China before the summer Olympics in Beijing in 2008. Shanda already operates two online fighting games, CyberStep’s GetAmped and Shanda’s in-house developed Kongfu Kids. Neither has attracted a large user base. DOA already has a large fan base among China’s affluent urban youth. While Sony and Microsoft have not officially released their consoles in China, both Xbox and PlayStation 2 are readily available, along with a slew of cheap pirated games. DOA is especially popular among China’s console owners, mostly for its overly violent and sexual content. Unfortunately, both of these selling points will have a hard time passing Chinese regulators. [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. Readers wanting to contact him can e-mail [email protected].]