The Online Game Industry in China: A Preliminary Observation on the Political Economic Structure

The paper studies the rise of online game industry in China. The main purpose is to examine the political, economic and cultural factors that contribute to the development of the Chinese online game industry. Recent industry report shows that broadband development in China has grown rapidly with tens of millions new participants joining the internet world every year (Pew Internet Report, 2007). From 2004 to 2006, the internet population in China grew at the double digit rates, rising from 18% in 2004; 18% in 2005 to 23% in 2006. The country is now the second largest internet market after the United States. As of 2007, China reached a total of 137 million internet users and had more than 70% of the internet participants under the age of 30 (So, 2008). The country also enjoyed itself as the world’s largest mobile market with about 443 million users in 2006 (Chinadaily.com.cn, 2006). China is now an emerging market that attracts foreign capital flows and is expected to achieve the revenue of $22 billion US dollars in the internet market by 2008 (BBC, 2008). 
 
China’s online gaming sector also grows with the development of broadband penetration. The market structure is dynamic because local players are compatible in competing with transnational media players. Transnational game companies in China include Ubisoft, Electronic Arts, and Viviendi. These companies operate their businesses with joint venture with local industry players. The top tier local game companies in China are The9, Shanda, Baidu, Alibaba, NetEase, Perfect World and Nineyou, etc. Some local companies are distributors or portal operators that release foreign and local games. Some other local companies are game developers producing games for MMORPG and casual game genres. The local companies in all encompass all levels of value chain from developing, publishing and distributing to constitute the industry dynamics of the online game industry in China.
   
This paper investigates the significance of the emergence of Chinese online game industry in media studies. On the theoretical level, the paper uses the case study of China to engage in the discussion of local effects in globalization studies. On the industry level, the paper proposes to see the internet use in China beyond the view of entertainment. The paper argues that study on the internet use of China should consider a deeper analytical level with the particular focus on the political economy of the online game industry in order better understand of the theoretical significance of the Chinese industry in (new) media studies.