Besides its busy mobile telecom sector, China also has a booming video gaming industry with mobile gaming revenue predicted to grow at a 51.5% CAGR between 2009 and 2014, reaching US$2.5 billion in revenue despite current market barriers, according to a new report from Pyramid Research.

Mobile Gaming in China: Waiting for a 3G Boost examines the state of mobile gaming in China, paying particular attention to the role of mobile data networks, the lessons of the overall gaming industry in the country, and the need for more gaming-friendly handsets. This 16-page report analyzes different types of games and identifies the challenges facing mobile gaming today, as well as the factors that will determine the success of mobile gaming initiatives in the market. The report contains two case studies: one on the free-to-play model and one on Chinese Internet giant Tencent's mobile gaming activities.

Apart from the growing game download business, the biggest opportunities in China reside in online multiplayer and casual mobile gaming, notes Luis Portela, author of the report; however, mobile gaming market development has so far been hindered by handset capabilities and data access costs. "Pyramid Research believes that to meet demand and live up to its potential, mobile gaming in China needs more affordable data access, wider 3G coverage, and better handset gaming capabilities," says Portela.

"3G is expected to contribute significantly to lowering mobile data access costs in a mix of increased competition and a government policy to boost adoption," Portela says. "The licensing of 3G, however, did not occur until 2008, and network rollouts are still underway," he explains. "The arrival of 3G has raised the profile of mobile online games and mobile operators, as well as Internet and gaming players are eager to expand their Internet footprints through mobile access. We expect increased 3G adoption to boost sales of devices with stronger gaming capabilities, including smartphones. "
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