Online Game Industry in China Wu Chang Ming

Online Game Industry in China Wu Chang Ming Chief Operating Officer, Junnet Online

Contents • Some statistics and forecasts of the Internet industry in China • Development history of online game industry in China • Current industry segmentation • Current industry participants • Role of Junnet Online in the industry • Junnet Online operation model and workflow • Future opportunities of online game industry in China

Internet users in China

Online game Market Size and Growth Rate

Composition of Game Players in China

Online Game Players and Forecast

Geographical Distribution of Online Game in 2002

Current Demographics – Experienced about 4 years development, still expanding – Near 90 operators, over 110 games – Male-dominated (92%) – Age group : 16 -25 (74. 6%) – Sourcing, Sinalization, Distribution – Japanese and Korean Games

Stage of Development for online game Mature Developing Initial Preparation Before 1996 1997 -2001 2002 -2005 After 2005

Online Game Industry Value Chain Development Game Developer Localization, Operation, Marketing Publisher Distribution, Money Collection Distributor Outlet to consumers Resellers/Shops

Popular Online Games in China • Korea developed – – – – 传奇 魔力宝贝 奇迹(MU) 龙族 精灵 N-Age 千年 • China developed – 大话西游 2 – 不灭传说 • Taiwan developed – 石器时代 – 金庸群侠传 • Hong Kong developed – 古龙群侠传

Junnet Group • Physical Distribution – Nationwide PC software and game distribution channel – Reaching over 10, 000 outlets across the nation – Offices in Beijing, Shanghai, Guangzhou, Chengdu, Hangzhou and Xian • Online Distribution – Nationwide PC online game distribution channel – Reaching over 9, 000 cybercafes across the nation – Offices in Guangzhou and Chongqing

Role of Junnet in the industry Product Planning Strategy Packaging Positioning Promotion Distribution Covering Nationwide Traditional Physical Distribution -7 -11 Retail Stores -Guangzhou Postal Services Development Sinolization Production QA Content Sales Channels > 90% Coverage Online Portal - Sina. com - Sohu. com - 800 j. com - dang. com - joyo. com -Junnet Game Portal

Role of Junnet Online in the Industry Game Supplier Cybercafe Game Supplier Junnet Online Platform Consumers Supplying cards Payment E-banking E-Cards Cash Recharge Cybercafe

Future opportunities of online game industry in China – – Brand Building Diversification Interaction between companies MNCs • Microsoft, Macromedia etc – Localization • 金山、联众、盛大网络

Major Barriers for growth – Piracy – Poor quality connection – No clear government direction – Slow update progress – Keen competition from foreigners – Small scale and capital – Weak developing