If you click on a link and make a purchase we may receive a small commission. Read our editorial policy.

China And The Future Of Gaming

In this latest guest post on RPS Chris "Evo" Evans looks at China, the net, its politics, and the future of censorship. Plenty of China-facts await.

It's the most populous country. It's record in freedom of speech is, to politely refrain from using the full range of ours, patchy. China's net-censorship is amongst the worst in the world. They also really like their MMOs. They're big on gold farming - the biggest, in fact. So there's a lot we know about China, but we don't often think how it all ties together. For the past twelve months, as part of my degree in Modern History and Politics, I have been living in a world of Chinese Whispers, writing a dissertation on Chinese Internet censorship. I didn't have a chance to properly examine games, censorship and the Chinese Government during that project, and so I'm grasping the chance to do so now.

My first port of call was gamers and how many there are. Just what faction of that enormous population is involved? If there's only five people and a dog sitting in a LAN Cafe, this really isn't that interesting, but it's somewhat more popular than that. The latest official figures China say that of the 298 million people who regularly use the internet in China, a massive 62.8% play games on it. That's 187 million people playing everything from subs-based MMOs to browser-based puzzle games.

That's a huge market. And, as with all huge markets, it has the power to generate a lot of money. Time for more numbers: hold onto your maths textbook firmly. It was recently revealed that online gaming in China generated $2.75 billion in revenue in 2008 with 77% originating with MMOs and the remainder from casual games. According to analysts, this is only the tip of the cash-berg: by 2013 the industry is expected to generate $8.9 billion. China Daily reported that the money generated in 2008 from the games industry was more than the combined revenues of the film, television and audio-visual industries. I suspect that won't ever be the same in the west, as our musicians don't exactly face the same problems in generating a little cash as theirs.

If you need a concrete example, looking at QQ Games gives an idea of gaming's scale in china. This games and community operator has 67 mini casual games, 5 advanced casual games and 5 MMOs in its portfolio. Two of those MMOs have seen more than one million peak-concurrent user accounts – which is hefty numbers for a game solely available in that one country.

Being responsible for the majority of the money generated in Chinese gaming, MMOs are the force of the industry – and the much-discussed virtual money trading is still a key part of it. Last year several billion yuan was spent in these games – and with so much cash flowing around the world, it doesn't exactly surprise you that the government has introduced a 20% tax on the profits that people are able to make by buying virtual currency and selling it on with a high mark-up for yuan. Can we expect similar initiatives occurring in the west? According to tax experts from the UK and US it is legal for people to be taxed on profits earned in online currencies . But back in China, the traders aren't completely dominant. Recently the Chinese government have prevented gamers using actual game currencies to purchase real world goods directly - the equivalent of being able to “cash out” your in-game wealth in the manner of swapping chips for real money when you leave the casino. That's one route to out-of-game wealth closed. The parallel trade system of virtual currency exchange (i.e. In the Game World party A gives party B gold, in the real world party B gives party A cash) remains untouched. How much of this dual-standard approach is because of worries about wanting to crack down on gambling and how much is due to the simple fact the latter is much more easily taxable and – fundamentally – an export.

Moving away from the money there are other far more wide-ranging examples of Governmental interference. It was recently announced that all online gamers in China would have to carry registered ID cards to play in cyber cafes. The Chinese governments’ press agency, Xinhua stated: “The system will restricts a minor's playing time by cancelling half their earned credits if they remain online for more than three hours a day. If the child plays for more than five hours a day, all of their gaming credits will be lost. The survey also showed that about 60 percent of youngsters are satisfied with the anti-addiction system.”

It's worth remembering that government surveillance is a regular motif in China. State employees are already paid to monitor forums and cybercafes. With the government's interest, the idea of people playing popular games to track discourse and dissent is easy – and with gamer's registered under their real name, easy to trace to an individual. However, while attacking personal freedoms, it's also a law which is trying to deal with what appears to be an enormous social problem: MMO addiction. We're all aware of the horror stories: gamers playing for three days straight and ultimately dying from their addiction. Of course the question of what games addiction actually exists is controversial, and another example of an East/West Divide. The American Medical Association is not yet ready to class excessive-gaming as a formal addiction while China has gone ahead and created clinics to treat it as exactly that.

But the issue of political censorship is what fascinates me most of all. It's not limited to China, of course. Australia’s attempts to extend its control are regularly discussed, and Germany has a decade-long history in having videogames altered with green-blood for their markets, the fear of actually being arrested for the law isn't nearly so constant.

What's also interesting is the focus of the particular censorship of these countries. What games do the Chinese censors target? Those which contain “content violating basic principles of the Constitution, threatening national unity, sovereignty and territorial integrity and that might divulge state secrets” and “online games with content threatening state security, damaging the nation's glory, disturbing social order and infringing on other's legitimate rights” are banned from being imported into the country. They're the same reasons why many websites have been blocked by China, though so far there's are only a few examples of games being banned.

Perhaps the most prominent was the Zero Hour expansion to Command and Conquer: Generals, banned along with Project IGI 2: Covert Strike for “intentionally blackening China and the Chinese army's image”. The Paradox game Hearts of Iron 2 was also banned and accused of “distorting history and damaging China's sovereignty and territorial integrity" because it portrayed several Chinese provinces as independent sovereign countries at the beginning of the game. When asked about the games censorship in China and how it may influence their future development, Paradox CEO Fredrik Wester said: “We do not see ourselves as having compromised at all in this particular issue. We have removed certain symbols from the game (like swastikas etc) but we have not changed any historical data when requested by specific nations” In other words, it seems likely that Hearts of Iron 3 will receive a similar judgment from the censors as its predecessor did.

Conversely, the intrinsically political Democracy 2 has not been banned... though one does wonder what would happen if Cliff had included China in the game. And... well, if it were more popular. In the last four years Cliff has had four direct sales from China, less than what he has had from countries such as Latvia and Kuwait, though one more than Fiji. “I don't see China as a decent market for me, because I make downloadable games and piracy is way too rife,” says Cliff on releasing his games in the territory, “If I move into mostly online games and support Unicode...”

There is also no question that piracy is a major issue in China. The censorship and import limits imposed on games are bound to lead to a rise in piracy. If Chinese gamers can’t legally get their hands on the next big thing at retail, then pirating it would be seen as a fair alternative. This is one reason why the online games market is so big in China, developers know that people will pay per month in order to play the game, thus negating the potential of loosing revenue through piracy.

Cliff’s comments speak of the barrier to entry to the Chinese market for small developers. How to make money when so few people actually buy games? At least the big players can make large steps. Nintendo went so far as to ask the US Trade Representative to encourage countries to take action against piracy. The company revealed that over one million fake Nintendo products have been seized by the Chinese authorities, though no counterfeiters have prosecuted. A year before the action by Nintendo, the US Trade Representative put China, along with Russia, at the top of a ‘Priority Watch List’ for rampant piracy.

My personal suspicion is that one of the true purposes of China net-controlling “Green Dam Project” is to try and curb piracy. The delayed project will eventually see all new PCs sold in China come with pre-installed filtering software. To state the obvious: this will simply make it easier for the Chinese authorities to spy on all aspects of people’s lives, the games they play and what they are doing in these games. If this to do with trying to make China a more attractive market for Western businesses, it could also be seen as the ultimate DRM. You think your issues with DRM are bad? Imagine if your PCs came with it pre-installed. And imagine how vindicated the exponents of DRM would start to feel.

It's fair to suspect that even this radical measure won't work, of course.

More significantly, the games industry is booming in China, but it is reliant on MMOs. Even that market will soon reach a saturation level, making it tough for Western companies to gain a foothold. To add to that, what we'll be looking at in Chinese markets are highly marketable Western franchises which can be micro-transaction driven (as in, applying Battlefield Heroes' approach to almost any game). How successful these are will depend entirely on Chinese gamers willingness to move on from their current, highly popular, locally made MMOs... all of which amounts to a force that is much more important than what the Chinese state decides to do: what the gamers want to do.

To conclude, it seems that in some extreme way, China may give us a snapshot view of how gaming may change in the coming years – a greater focus on online games and potentially greater governmental interference in all aspects of the net. No matter how we currently feel about our own situation, and the power and influence of Western attitudes towards the net, we are probably going to end up being amongst the minority of net users. What happens in China certainly bears close watching, because there's more than Gold Farmers in them there hills.

Rock Paper Shotgun is the home of PC gaming

Sign in and join us on our journey to discover strange and compelling PC games.

Related topics
About the Author
RPS avatar



The all-seeing eye of Rock, Paper, Shotgun, the voice of many-as-one.