Alliance set to drive China gaming
Three firms to combine technology for slice of market action
An alliance between Shenzhen Domain Network, Huawei Technologies and United States-based Advanced Micro Devices (AMD) looks set to fire up China's internet gaming market.
The three companies said they will jointly support the development and marketing of a new-generation online gaming network, based on their technologies. No investment figures were given.
The online gaming market in China is forecast to grow from US$580 million last year to US$1.7 billion in 2010, according to research firm DFC Intelligence.
Online gaming carrier and software firm Shenzhen Domain Network will run the advanced network as a vehicle for its premium games, including the upcoming Huaxia2.
Hong Kong-listed Tencent Holdings, an instant messaging and internet game portal operator on the mainland, is a minority shareholder in the company.
It will adopt equipment based on the Telecommunications Standard Service Platform from network gear-maker Huawei and chip supplier AMD. The computer and networking infrastructure is designed to speed up and boost play for the large multiplayer community and casual gamers.
Zhang Yan, chief executive at Shenzhen Domain Network, said: 'We will work together to make more exciting gaming experiences available for tens of thousands of our customers in China.'
Mainland-based iResearch estimated the number of online gamers in China will reach 37.31 million next year from about 29 million last year.
Shenzhen Domain Network, founded in 1997, needs to make a big splash on the Huawei and AMD-powered network.
The company's online game, Huaxia2, has taken about two years and US$8.5 million to design and develop. The firms said market tests of the game had aroused much interest from users on the mainland.
'Because the top games in China can generate as much as US$100 million a year for several years, at first glance the market looks very attractive,' said DFC Intelligence analyst Alexis Madrigal.
'However, it is clear that margins are headed down as the business matures.'