THE growth of the local online gaming industry will follow the growth of broadband Internet in the country.

Amid an ongoing economic recession, industry executives said the local online gaming industry remains to be small because there are still untapped locations where there could be gamers.

“Broadband Internet penetration is still small. Majority of players are in the Internet cafes. We’re hoping that it becomes affordable for people to play at home when prices of Internet usage go down,” AMDG Vice Chairman Arturo Diago, Jr., said in a recent briefing.

Gaming is seen to be one of the cheapest forms of entertainment, according to iAM Interactive President and CEO Fadzly Yusof.

The company is seeing more growth in the overall local gaming industry as competition intensifies.

In fact, iAM is even looking to launch at least two new games within the year, including a new massively multiplayer online game similar to two of its previously distributed titles, Guild Wars and Lineage II.

The company recently launched its first casual racing game GoGo Racer and an anime-styled shooter game called Exteel.

Both games are on a free-to-play platform, with an in-game item mall, which charges players for certain items purchased.

Yusof said online game publishers are also expanding to other markets. iAM is targeting three countries: the Philippines, Singapore and Malaysia. “This allows us to expand our revenue sources.”

By Rhee So-eui and Michael Wei
Reuters

SEOUL/BEIJING–Flush with cash from IPOs and a lucrative online game operating business, Chinese companies are trying to expand into game development, breaking free from their dependence on foreign titles and boosting incomes.

After long relying on foreign hit games such as U.S.-based Activision Blizzard’s “World of Warcraft” (WOW) and “Kartrider” from South Korea’s Nexon, China now wants to develop its own blockbusters and eventually lead the fast-growing market.

It may be a while before China overtakes South Korea, which dominates Asia’s online gaming market, but there are growing signs that Chinese firms such as Netease.com and Tencent are now in a strong position to compete globally and are catching up with rivals quickly.

Successful online games can generate earnings for years from monthly service fees, character customization and other micro-transactions and carry higher margins than classic console games. Developing games in-house also reduces uncertainties over license contracts and renewals.

“We consider in-house development a sound business model, which brings relatively high margins,” said Phyllis Sai, spokeswoman for Nasdaq-listed Chinese game firm The9.

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