Online gaming and ESports is starting to gain some significant popularity in China, which is said to be potentially one of the biggest markets for pro gaming, online gaming, and mobile gaming. According to the research firm Niko Partners, the online games market in China will reach $11.9 billion this year in revenue, and it will continue to tack on $2 billion more each following year for the next 5 years.
The online games industry in China has grown from a $100 million industry in 2001 to a $9 billion industry as of 2012. Many gamers in China are currently addicted to League of Legends, with many of them going to their nearest I-cafes to play. With the expanding popularity of online gaming and competitive gaming, many companies are investing their resources into China in order to take advantage of the future goldmine.
Riot Games, the creator of the vastly popular League of Legends game, will be holding its LCS All-Stars tournament in Shanghai from May 24th to May 26th. It's the first time Riot will be holding an international event in China, and its expected to be the biggest all-start event "in gaming history". Activision is also looking to get its foot into the Chinese market. It teamed up with Tencent, a Chinese investment holding company with 37% of the Chinese PC online games market share, to test out Call of Duty Online in the country. The game recently underwent Alpha testing, and it will be available free to all players in China.
Online games have huge potential in China, and many developers are planning on bringing their games over. However, Niko Partners advises game developers to only launch free-to-play games in the country. Niko Partners told Forbes that the current F2P model, where gamers can play the game for free, but can also purchase in-game items with real money, has been working well for China. The research firm says,
"It is the business model that makes sense for that culture, and in my opinion for the rest of the world too. Pay for a service to access a digital product, not the easily-copied digital product itself. Pay to be part of an experience, and pay for as much of that experience as you want to pay for."