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Download report: Peggy_Conference

The Chinese online game industry is one of the fastest growing interactive entertainment
industries in the world. The industry now launches more than 200 game titles to the market
annually. Some popular game characters have become cultural icons in China. As the market
landscape expands, the industry continues to attract new ventures. The Chinese online game
industry is a fast follower of South Korea and the United States. This industry has an
expanding gamer base with local media entrepreneurs now producing games that meet local
consumer demand. The industry has become a competitor comparable to online game media
giants in the global marketplace. This paper uses Michael Porter’s competitive advantage
model to study industry dynamics in the online game industry in China and engages in the
globalization debate by analyzing industry factors contributing to the emergence of local
game companies. Analysis of fieldwork interviews shows that China’s competitive advantage
includes factors such as the country’s large market size, growing local demand, improvement
of advanced game production skills, aggressive industry rivalry and agglomeration between
the game industry and supporting industries. This paper also argues that corporate strategies
that emphasize the local adaptation of China’s particular media ownership structure and
emerging consumer power are other factors that go beyond Porter’s model. These factors
show the competitiveness in the political and cultural dimensions of the online game industry
of China.