Vivendi Games, the developer of the world's most popular massive online game, World of Warcraft (WoW), will continue to launch games in China despite industry fears of rampant piracy stifling earnings.
Bruce Hack, CEO of the Los Angeles-based Vivendi Games, said in an interview in Beijing that three of his company's four units Blizzard Entertainment, Sierra Online, and Vivendi Games Mobile are all thinking about introducing new games into China.
Meanwhile, rival game firms are still balking at entering a market plagued by piracy and rip-offs.
Sierra Entertainment, which focuses on console games like Microsoft's Xbox and Sony's PlayStation, has no immediate plans to bring games to China. Microsoft, Sony and Nintendo have not launched their products in the country.
"China is a big priority for us," said Hack. "It is a big market for us today and it will be a bigger market for us tomorrow."
While many other international game developers such as the French firm Ubisoft and US-based Electronics Arts were afraid of piracy in China, Vivendi Games sensed the opportunity in the online game market in 2003 and signed Shanghai-based The9 Limited to run its WoW in 2004.
China's online game market almost tripled from 2003's 1.32 billion yuan (US$159 million) to 3.73 billion yuan in 2005 (US$450 million), according to the US market intelligence firm International Data Corp.
It was reported that NASDAQ-listed The9 agreed to pay US$51.3 million in four years in licensing fees and give 22 per cent of its revenues from the operation of WoW to Blizzard Entertainment.
Since the game was launched last June, The9 earned revenues of US$102 million from game playing, related merchandise, and installation packages by the end of the second quarter.
Hack declined to disclose how much his company has made, but said China was one of the top three markets for WoW.
Blizzard Entertainment will also introduce an expansion pack to the game, The Burning Crusade, in order to increase attraction and extend the product's life cycle.
The company worked with another Chinese online game operator, China Cyber Port Co Ltd, to launch successful games like StarCraft, WarCraft and Diablo.
In the online casual game segment, Vivendi Games said in September it acquired Studio Ch'in in Shanghai, which has 49 game developers. The company declined to reveal the acquisition's cost.
Hack said the Shanghai studio, together with its two in Los Angeles and Seattle, will increase the development strength of Sierra Online and will serve as a base for the development of localized games.
"We want to be very careful that the content we bring to this market is local content, especially in casual games," Hack said.
Sierra Online is talking with Chinese casual game operators such as Hong Kong-listed Tencent, the biggest in the Chinese market, about launching some of its popular casual games.
In the world's largest mobile market, with more than 443 million users, mobile games are also an area Hack is interested in.
"We see it as a very interesting opportunity," said Hack.
He said Vivendi Games Mobile is in talks with Chinese service providers such Beijing-based Moloon International Inc, which got investment from the US firm IDGVC Partners.