The first Chinese-made online game, "Legend of Knights Online" was played by 80,000 paying simultaneous players in the past week, as the local gaming industry started to challenge the aggressive Korean-dominated market.

"It proves the charm of homemade online games, which have begun to serve as a catalyst for the rebirth of the whole information industry," said Liu Shifa, with the Ministry of Culture.

Earlier this year, of the top 100 tycoons on the Forbes list, three from the IT industry confirmed that most of their wealth had been made through the online gaming industry.

Reports from US-based information technology market research house International Data Corporation (IDC) showed that online games are expected to bring two billion yuan (US$240 million) to Chinese game makers this year and a record eight billion (around US$960 million) in 2006.

As an engine industry, it has fueled related sectors in the business chain, such as hardware and telecom industries.

Internet cafes across the country are often packed with people playing online games till the early hours. Game makers, such as Beijing-based Kingsoft company, developer of "Legend of Knights Online", purchased several hundred Internet servers to cater to the surging tide.

"The popularity of online games indicates huge market potential for hardware including computers and Internet servers," said Lei Jun, CEO of Kingsoft.

A survey showed that as the flow of narrow band is only enough for checking email and exploring websites, nearly 10 million people have subscribed to broadband services for the purpose of playing online games.

According to IDC, the direct contribution of the online game industry to telecommunication sectors was worth 6.83 billion (US$823 million) in 2002.

The software industry, which has been a remarkable growth point worldwide for years, has not really prospered in China due to rampant pirating. Self-developed PC games have struggled for seven difficult years here.

But that was not the case with Internet gaming as players couldn't be part of a game until they logged on with the prepaid billing card.

Legend has it that a Shanghai-based software company Shengda made sales revenue of 400 million (US$48.2 million) in one year with a Korean-developed online game. Over 70 domestic enterprises have joined the online game industry.

Speaking of the success of "Legend of Knights Online," the company's domestically-based status, in Lei Jun's eyes, is a big winning strategy.

"Whoever stands closest to the customers will prevail," he said.

With frequent responses from customers, Kingsoft updated 30 versions of the game within two months of the market test period.

"Overseas companies could never be as responsive," said Lei Jun.

But the real success of "Legend of Knights Online" was due to its story line based on popular Chinese martial arts and Chinese-style love affairs. Nurtured in a 5,000-year history, Chinese players are more fascinated by the "Xia" or Chinese "knights" than” monsters and soldiers " often seen in overseas games.

Kingsoft plans to promote the game overseas when the time is right. "The Oscar winner 'Crouching Tiger, Hidden Dragon' was a worldwide hit, and we believe our game with a similar story will also capture players worldwide," said Lei Jun.

The Chinese government is planning to grant the online gaming industry the same status as the high tech and service sectors, in terms of preferential policies for tax breaks and other support.

In November, China listed online gaming in the country's "863 program", a national science and technology program, and established gaming software development at Chengdu's Sichuan University.

"China is committed to developing the core technology of the online games locally", said Li Wuqiang, from the Ministry of Science and Technology.

Long scorned and despised as "electronic heroin" in China, online games now teach people history and culture.

"The virtual world provides a platform to communicate with people that you would never meet in daily life and experience the fun of teamwork," said a player.

Chinese domestically made games account for only 10 percent of the whole industry, with Korean games making up 70 percent. "Chinese game makers still boast great potential," said Liu.

(Xinhua News Agency December 17, 2003)