Dynamics in the online game industry of China: A political economic analysis os its competitiviness

Pichi Chung, Jiangping Yuan


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.

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