Piracy-proof online gaming pulls in cash

Online gaming in China is turning into big business. Leading game-operator Shanda pulled in close to US$50 million in revenues last year, and gamers spend so much time online that they generate hundreds of millions of dollars in access fees.

As the pie gets larger, online game developers and operators are battling for supremacy with a ferocity matched only by the online gamers themselves.

This competition took a new turn when Shanghai-based Shanda launched a new version of Legend of Mir II , a game it had previously licensed from South Korean game-publisher Actoz.

Legend of Mir II had become one of the most popular massively multiplayer online games (MMOGs) in China, attracting up to 650,000 simultaneous users during peak times. To support this level of traffic, Shanda set up more than 3,000 PC servers in more than 30 cities across the mainland.

Despite the success of the game, problems between Shanda and Actoz emerged when pirated versions of the game's server-end programs began to pop up in China, allowing gamers to play the networked game without paying Shanda.

Shanda blamed Actoz for accidentally leaking the programs to China, threatening Shanda's revenues and its status as the exclusive distributor. When Shanda delayed its payment to Actoz for two months in response, the publisher said it would terminate its distribution relationship with Shanda on January 24.