Changing policies to help Net profits

PUBLISHED : Monday, 26 January, 2004, 12:00am
UPDATED : Monday, 26 January, 2004, 12:00am

As the number of online gamers soars in China, new rules will enable the government to harness the internet's potential, stop young children going to web cafes, and control cyber pornography

Whether deep in Beijing's university district in the late hours of the evening or downtown in the middle of the day, internet cafes share one thing in common.

Upon entering the cafe - or wangba - customers navigate through cross-room shouts of 'Where are you?' and 'Gotcha!' as online gamers shoot, chase, help and destroy one another in games played across the globe.

With estimates of online gamers pegged between 13.8 million and 19 million in a country of 79.5 million 'netizens', online gaming is no fringe activity.

But the government has long been wary of the internet, seeking to control its growth as a source of uncensored information rather than promote the gaming industry as a source of revenue.

Barely a week passes without another report of adolescents addicted to online games committing often bloody crimes.

'Wangba and gamers have always had a bad reputation,' says Sam Gao, who runs Firefox, a Beijing internet cafe. 'The media coverage is written to frighten people, but most people that play games are quite gentle. The games are just that - games.'

Despite the negative press, the industry's development in China has been so rapid in recent years, it has become impossible for the government to ignore it.

Xinhua described recent industry statistics released by the China Internet Network Information Centre as 'simply so beautiful, one can't take them all in'.

The number of China's internet game players rose by 64 per cent last year as more Chinese gained access to computers in the world's second-largest PC market, according to a report published by the China Game Publishers' Association.

Revenue generated by the industry grew by more than 45 per cent year on year to 1.32 billion yuan. Total revenue is expected to hit 6.7 billion yuan by 2007.

A major part of the 'beauty' of the statistics now emerging from the sector is that they represent a boon to home-grown talent.

Chinese game companies are beginning to challenge the traditionally Korean-dominated market, and, seeing the sector's potential, the Chinese government is getting involved.

Another added advantage is that unlike traditional computer games, online games are virtually piracy-proof because of the need to connect to a server to take part. This has seen local internet service providers - such as, and - rake in huge profits.

Plans to grant the online gaming industry preferential policies, tax breaks and more are being drawn up to promote growth. Online gaming has been listed as part of the mainland's national science and technology project 863 Program, and the country's first gaming department has recently been established at Sichuan University to train programmers.

China is committed to developing online games, says the Ministry of Science and Technology.

In November, the All-China Sports Federation officially recognised electronic video gaming as an official competitive sport, and, along with the Chinese Olympic Committee and conglomerate Citic Pacific, created China Interactive Sport. Two websites were launched, China Esports Games ( and China Interactive Sports (, to act as China's online gaming and sports headquarters.

Their goals, according to a press release from China Interactive Sport, are to standardise and guide the development of gaming, raise the level of e-sports in China, and promote games with Chinese characteristics.

In Shanghai, a national gaming contest saw a team from Sichuan defeat 10,000 other contestants to take home an Audi A6 sedan - a large chunk of the total 1 million yuan in prizes - at the Chinese-developed World of Legend.

The fact that a national gaming team is a possibility means the government is willing to offer more than supply-side help through industry benefits.

To an industry the state media has recently blamed for poisoning the minds of the country's youth, this is no small feat.

Firefox's clientele is composed primarily of people seeking entertainment - chat rooms or games. On a recent weekday afternoon, 14 of the main room's two dozen terminals were occupied by gamers.

But recent statistics show that cafe's such as Mr Gao's do not represent the industry's future, as the number of home users increases. According to the China Internet Network Information Centre, 66.1 per cent of internet users are now going online at home, a result of lower surfing costs and the widespread availability of broadband connections.

With the number of gamers logging on at home rising, the industry is expected to keep growing in the coming years.

But it's not all good news. The industry is losing an estimated 100,000 yuan daily as a result of illegal servers. Cheating software, which enables players to give themselves unfair advantages in a game, is also driving away legitimate players who cannot compete.

To tackle the problem, a National Copyright Administration official told the Interfax news agency that the first three months of this year would see a campaign aimed at inspecting illegal servers and websites offering cheat software, and punishing those involved.

At present, no law exists to regulate server piracy and cheat software, which will make it much more difficult to crack down on the perpetrators.

But the current situation does have hidden benefits.

'There's one gamer I know who made himself invincible,' said Mr Gao. 'He wasn't a great student but he taught himself programming to get unlimited lives and ammunition, that sort of thing. Sure he's a game cheat, but he is writing programs.'