Taiwan Gets Online Gaming

The market for online games in Taiwan will exceed $300 million this year

Business intelligence and consulting firm Pearl Research has released a new report Online Games Market in Taiwan, which forecasts that the market for online games in Taiwan (including MMORPGs and casual titles) will exceed $300 million this year. This follows an "extremely robust" 2006, according to Pearl Research Managing Director Allison Luong who told us that last year "two of the largest game operators in Taiwan combined achieved more than 25% year-over-year revenue growth."

So what's driving the continued online games growth in Taiwan in 2007? Pearl Research's key findings explain it as follows:

• Compelling and culturally relevant game content, the low cost ($12-$15 per month) to play online games and a high 67% Internet penetration drove growth in the Taiwanese online games market. While massively-multiplayer online role-playing games (MMORPGs) continue to represent the largest segment of the online market, casual games are growing at a faster pace and can represent more than 35% of the market.

• Since 2004, the introduction of free-to-play games has helped revitalize Taiwan's online games industry. Game operators believe gamers end up spending more under a free-to-play model compared to a traditional subscription model. Under a free-to-play model, gamers play a game for free but can purchase virtual items or value-added services, typically priced from $0.25 to $10, to enhance gameplay.

• Taiwan also has a fairly robust development community, with many companies developing games since the early 1980's, first on packaged PC and now on the online platform.

When we think of casual titles, a different demographic usually comes to mind, but Luong indicated that the hardcore MMO players have shown interest in casual games as well, helping to fuel that segment's growth. "Casual games are growing at a faster pace due to the popularity of the content and its appeal to a wide audience. Many MMORPG gamers also play these advanced casual games due to the ability to consume 'bite-sized' entertainment," she explained to us.

Of course, with MMOs still representing the largest area of online gaming in Taiwan, the PC remains the dominant platform in the online arena. Piracy has also been a big problem throughout Asia. That said, Luong does see consoles making some progress.

"Console hardware sales have always been relatively robust in Asia; however, software sales have been adversely affected by piracy. Still, countries like Hong Kong can have very high rates of Xbox Live adoption," she said. "One of the drivers is that countries such as Taiwan, Hong Kong, Singapore and Korea have extremely high rates of broadband penetration in addition to avid gamer populations. There is progress with the growth of online gaming on the consoles but it will take time for console hardware penetration rates to reach critical mass levels."

Before it's here, it's on the Bloomberg Terminal. LEARN MORE