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A study on current business performance of Chinese animation industry - page 8 / 21





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grew at double digit rates, rising from 18% in 2004 to 23% in 2006. As of 2007, China had a total of 137 million internet users, with more than 70% them under the age of 30 (So, 2008). The country also established itself as the world’s largest mobile market with about 565 million users in 2007. In 2006 the scale of online animation was 10 million RMB, and it is expected to be 100 million RMB in 2010. Online game had more than 33 million users in 2006, and increased by 61.5% year after. The industry now launches more than 200 game titles to the market annually. Due to internet piracy, major global game companies such as Sony, Nintendo and Microsoft have kept away from the Chinese market (The Economist, 2008). The absence of console game

players has led to the rise of online games in China. Ubisoft, Electronic Arts, and Vivendi are the three foreign companies that have entered China by either engaging in mergers and acquisitions or joint ventures with local game companies. In 2007, 65% of China’s online game market belonged to Chinese local software producers.

The current industry structure shows that there are two tiers of local game companies (Chung and Yuan,2009):

first tier and second tier. Large-scale Chinese companies such as The9, Shanda and NetEase are the first tier companies, occupying seventy percent of total martket share (Figure 8) (Koo and Waide, 2006). Second tier

corporations includes very specialised companies who serve as distributors or portal operators, or produce local MMORPGs (Massive Multiplayer Online Role Playing Game) and casual games. Mobile animation and game is another profitable area in the industry with more than 10.800 billion RMB in 2007 (Figure 9).

Figure 6: Market demand for Chinese animation industry Adapted from 2008 Chinese animiation industry report

Figure 7: Market demand for online animation in China Adapted from 2008 Chinese animiation industry report


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