In-Depth Report on China's Internet Cafés Shows Their Importance to China's Online Games Sector

SAN JOSE, Calif. - August 14, 2008

Niko Partners, the leading market intelligence firm for China’s video game industry, today announced the results of its first report dedicated to analysis of Internet cafés in China, that provides insight into Internet café usage, the role of cafés for online games, typical PC hardware specifications, purchasing, and relationships with online operators in 18 cities of varying sizes and geographic locations. Furthermore, information from a survey of 500 gamers reveals important information about their behaviors that companies involved in game development and distribution need to know.

“As video game publishers look to break into and successfully compete in the burgeoning Chinese market, it is critical that they understand underlying consumer behaviors and how Internet cafés are a critical component of China’s online game market,” said Lisa Cosmas Hanson, managing partner of Niko Partners.“This study takes into account a survey of 507 cafés in 18 cities providing insight to online game operators and publishers, and will help business development executives from both PC hardware and game software companies make sound decisions as they increase their emphasis on China’s market.”

Chinese gamers in large cities such as Shanghai and Beijing often have home PCs, but still visit cafés for online gaming to socialize and compete with friends. In China’s more rural areas and smaller cities, gamers may rely solely on Internet cafés for Internet access and to play online games. China’s Internet Cafés Study 2008 is relevant to foreign companies because it elaborates on topics such as:

• The importance of the Internet café channel for online game operators, who in 2008 will generate approximately 40% of their $2.5 billion service revenue through it.

• The typical hardware specifications of the roughly 21.9 million PCs that are installed in cafés throughout China.

• The revenue breakdown for this $20 billion Internet café industry.

• The regulations governing the estimated 185,000 Internet cafés nationwide in China, 71,000 of which are unlicensed by the appropriate regulatory authorities.

China’s Internet Cafés Study 2008 may be purchased for US $3,500 directly from Niko Partners, or as part of an annual subscription to Niko’s research services. To purchase this or any previous report, contact Niko Partners at +1 408 354 0888, or email your request for information and tables of contents to info@nikopartners.com.

About Niko Partners

Since 2003, Niko Partners has specialized in market intelligence for China’s video game industry. We conduct syndicated and custom research studies on Chinese gamers, online games, offline games, consoles, handhelds, regulatory issues, piracy, development, online operators, distribution, and retail. We offer consulting services including focus groups, partnership selection, market opportunity analysis, custom surveys in cities throughout China and customized data analysis. The goal of the research and strategic advisory services is to help video game industry clients understand the market, strategically enter or expand market share, and continue to profitably grow within China. The company is based in Silicon Valley and Shanghai and its clients include worldwide leaders in the video game industry such as Blizzard Entertainment, Electronic Arts, Microsoft, Nintendo, Nvidia, Disney Interactive Entertainment, THQ, Macrovision, Tetris, Sony Online Entertainment, Lucas Arts, Xfire, as well as many other corporations, investment companies, and consulting firms.

Lisa Cosmas Hanson , Managing Partner, Niko Partners

1-408-354-0888

lisa@nikopartners.com

Julia Roether, Vice President, TriplePoint

1-310-231-8781

julia@triplpointpr.com


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