World of Chinese Warcraft

Where Chinese gamers go, the world may follow.

Published January 17, 2006 9:34PM (EST)

In 1985, I rode in a rickshaw pulled by a skinny old man in the port city of Xiamen, a town in the province of Fujian. Last week, Xiamen hosted China's annual online gaming industry conference. I know, I know, that's an almost meaningless juxtaposition, but I can't get it out of my head. Today, if you want to experience the imperialist guilt induced by a rickshaw ride in Xiamen, you'll most likely have to go online and find a virtual one in some massively multiplayer online role-playing game. And it just won't be the same.

By way of Gamasutra, we learn that a report released on Jan. 11 at the Xiamen conference pins the total number of online game subscribers in China at 26.3 million, while revenue from gaming hit $470 million. "The figures are a 30 percent increase over 2004's subscribers and a 52.6 percent increase over the 2004 total income," stated the report.

That's pretty healthy growth, even if the numbers arrive at a time when, warn Western analysts, China's gaming market is temporarily down. Just today, Shanda, one of China's three biggest online gaming companies, announced hundreds of layoffs.

But the travails of one company aren't likely to topple the entire sector, and the sheer numbers involved make China's gaming industry very intriguing to foreign investors. As was explained to me by one analyst last summer, when you have a million people simultaneously playing in a single game, you start dealing with questions of scale that break new ground.

"If you think about the infrastructure it takes to support the interactivity of a million people in real time," said Michael Borrus, who works at the venture capital firm Mohr-Davidow, "there could be pretty interesting technology [coming out of that] and there will be innovation in content."

In other words, the sheer size of the problems that one must deal with when that many people are simultaneously chasing after Orc warlords means that Chinese companies are going to be forced to come up with new wrinkles before their counterparts in the U.S. Which means those companies might be a better investment than your typical Chinese semiconductor design house or cellphone manufacturer.

Of course there's always the chance that the Chinese government will start to get concerned about the spiritual pollution that is no doubt rampant among China's millions of addicted gamers, and put the kibosh on all the virtual mayhem. But you'd think the government would rather its young and restless online and out of the way than, say, joining the peasants on the barricades at Panlong.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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