More Games: Coming Soon to a Stock Market Near You...

Filed in archive Venture Capital on June 11, 2007

With all the recent activity to start a virtual world for China's Internet audience and with companies like The9 getting large chucks of venture capital money to bring Chinese gamers a higher quality of product, it's no surprise to hear from Gareth Powell at China Economic News on Friday that more of China's online gaming companies are looking at floating IPO's in markets outside China in the next year.

China has become the world's second largest Internet marketplace. Internet use in China actually surpassed American Internet use sometime last year. There are now between 150 and 200 million Internet users in China. Forbes reported last year that American users spent about 130 million hours per week on the Internet, while Chinese users spent a whopping two billion hours per week at their terminals.

Online gaming has become a preoccupation in Communist China. Take, as an example, the story that Luke Razzell blogged last month about the Chinese couple fighting for custody of their online identities in divorce court. The estranged husband and wife jointly owned more than 10 ZhengTU Online accounts - each representing an online identity. Because of the level of success they had achieved through the game, each identity, according to Razzell, is worth about RMB 10,000 (around $1,300). The husband wants to keep all ten online identities and let the wife have their newly renovated apartment. The wife wants to split the real stuff and the virtual stuff down the middle. The story was also covered by Pacific Epoch.

So with such enthusiasm for its product in the Chinese market place, ZhengTU is one of the companies looking at floating an IPO in the next year. At the moment ZhengTU is China's third place gaming company and has about a 15% market share in China. Also looking at an IPO next year: 9you and Kingsoft, both in the gaming company top ten in China...