Inside Asian Gaming
INSIDE ASIAN GAMING | February 2009 16 O ne of the great appeals of the soft gaming model, especially in Asia, is the sheer size of the market. There are tens of millions of young people with increasing levels of disposable income. CryptoLogic’s Shailesh Naik reckons there are 100 million people in Asia alone with access to either a PC, an Internet enabled mobile phone or both. In July Taiwan’s GigaMedia, which already operates Everest Poker, one of the most commercially successful online poker rooms in the world in revenue terms, announced it had acquired an exclusive three-year licence for Web distribution in China of Electronic Arts Inc’s basketball game NBA STREET Online. ‘NBA’ is consistently the most searched sports term on Baidu.com, the top search engine in China. Social networking In China one of the potential ways of contacting these young consumers isTencent QQ.This instantmessagingandnetworking site, with its winking cartoon penguin icon, is little known outside China, as its platform program is only available for download domestically. Yet for its third quarter results in 2008, Tencent QQ’s Hong Kong-listed parent Tencent Holdings, claimed the total number of Instant Messaging (IM) user accounts registered within China amounted to a mind boggling 856.2 million, though the number of active IM accounts were a more modest but still huge 355.1 million. Tencent claimed the number of peak simultaneous online user accounts for IM services amounted to 45.3 million, a growth of 7.9% quarter on quarter. More significant from the perspective of online gaming service providers, is the number of peak simultaneous users of QQ Game portal playing mini casual games. This stood at 4.4 million, the equivalent of almost the entire population of Singapore, and represented an 11.2% growth quarter on quarter. The company said the total number of people paying subscriptions for Internet Value Added Services was 30.3 million, an increase of 16.1% quarter on quarter. Total sign ups for Mobile Value Added Services were 14.8 million, an increase of 10.4% quarter on quarter. Cover Story Numbers Game Asia has millions of gamers A n increasing number of gaming service providers in Asia are expanding their services and content to meet the demand for soft gaming coming from the China market. PacNet for example is developing role-playing games for delivery to PCs to complement its existing mobile value added services such as casual gaming and its online lottery software. The advantage of subscription and soft gaming formats for companies that have traditionallyofferedcasinoorothergambling games is that although they typically offer smaller margins, they appear to attract less regulatory heat from governments than ‘hard’ gaming products. Acceptance Shailesh Naik, of CryptoLogic, makes this point explicitly. “We have now the ability to deliver in China games that would be recognised as gambling games in Europe or elsewhere, but are actually legal in China,” Mr Naik told an industry audience at the Asian i-Gaming Conference & Expo in Macau last year. His colleague Ken Crouse, Senior Director, Product Strategy, pointed out at the same event that there is also typically a distinction between margins on role playing games and games of chance, even when the latter is played in subscription format. “Margins on games of chance are typically high,” says Mr Crouse. “Margins on games of skill and role- playing are not so high, so we would like some of those skill game and RPG customers to come over to games of chance. That latter market in itself is so large that we think this will be as big, if not bigger from a revenue standpoint than our traditional online gaming markets.” Diversify to Accumulate Providers of services for hard gaming are turning soft Shailesh Naik, Managing Director of CryptoLogic Asia Pacific
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