According to CTR Market Research, about 68 percent of netizens play online games and the average age of online game players is 24. Those people will spend an average 188 yuan each month.

Domestic vs. imported

Attracted by the lucrative market, online gaming giants have flowed into the Chinese market, such as Blizzard Entertainment, whose World of Warcraft amazes Chinese online game players.

However, as the examination and approval procedures for imported online games are stricter than domestic ones, many overseas online gaming companies would rather set up joint venture companies with local Chinese ones.

Earlier, many Chinese online game operators heavily depended on foreign game developers who were in a dominant position in the industrial chain. For instance, Shanda Entertainment, established in 1999, is one of China's first online game operators. It once focused on providing services for South Korean online games such as Legend of Mir, Fortress 2 and Shattered Galaxy. The service charge and revenue brought about by selling virtual gear made Shanda's owner Chen Tianqiao a legend worth 6 billion yuan and ranked the second richest IT mogul according to the 2006 China IT Rich List released by Rupert Hoogeverf.

"Owing to the lack of indigenous Chinese games, many game products coming from different cultures and value systems had an adverse impact on Chinese youngsters. This forced Chinese game operators to develop their own games," said Wang Hui, Deputy General Manager of JoyChina, an online gaming company.

Therefore, Chinese companies took up the challenge to develop online games and to market them to the game players. At present, domestic Chinese games take up about 64 percent of the total online gaming market in China.

In the meantime, Chinese online games are also exported to foreign countries.

"Chinese online games are popular among foreign players," said Ren Jian, CEO of Kingsoft Corp. "The rich culture and history provide enormous resources for online game development."

It is estimated that China had sales revenue of over $20 million in the overseas market in 2006, mostly to neighboring countries like Viet Nam and Japan.

However, as the 25-year-old online game player Zhang said, "Domestic online games are too simple and don't challenge much."

Foreign online gaming companies are superior in capital supply and have powerful research and development. When China further loosens its restriction on those companies, domestic online gaming companies will suffer.

Currently, according to the 2006 Gaming Industry Report, foreign online games account for about a 40 percent market share in China.