Evolution of Business Models Have Blurred the Line Separating Online Game Genres in Hong Kong

IDC:' Online gaming market in Asia/Pacific excluding Japan (APEJ) region revealed that Hong Kong totaled US$30.6 million in subscription revenue in 2005, growing by approximately 11% over 2004. The increasing popularity of casual games has given the market another new area to spur growth. While Massively Multiplayer Online Role Playing Games (MMORPGs) have been the mainstream game genre for several years now, but lately this space has started to shown signs of saturation.

In the early days, MMORPG was the sole genre that derived revenue from content generating subscriptions (for those that charged online players). Casual online games, on the other hand, were either free or derived revenue from advertising and sponsorships. The necessity of paying subscription fees was a significant and frequently asked question of gamers. With the emergence of casual games, gamers starts shifting from the MMORPG genre to the other new area.

Instead of being a value-added concept, business models have evolved to include selling virtual items like virtual-money, clothes, weapons, and even virtual backgrounds. In addition to launching games, introducing new virtual items in limited quantities is also helpful in retaining existing gamers. While communities are important to online gamers, collecting rare virtual items allow a gamer to show off among his online peers.

In 2005, Hong Kong held a 2.2% market share of the APEJ region's total subscription revenue of US$1.39 billion. The region's market is expected to grow at a compound annual growth rate of 21% from 2006 to 2010 reaching US$3.6 billion by 2010. The growth is driven by the rapidly increasing numbers of varied players in the online gamers ecosystem. Telecommunications service providers, online game developers, and even traditional information and communication technology (ICT) vendors are showing growing interest in this fast-emerging market. The region's market is expected to breach the US$2 billion mark by 2007, with the entry of several new countries into the region's online gaming radar, albeit the current lack of commercial values in India, Indonesia, and Vietnam.

Asia/Pacific excluding Japan Publ 20060620