Five game firms tipped to float on foreign markets next year

UP to five domestic game firms are expected to float shares in overseas stock markets within the next 12 months as the Chinese market rapidly grows, a senior official at General Administration of Press and Publication said yesterday in Shanghai.

"Second-tier domestic game firms have popped up and their average income growth is even higher than the market leaders Shanda, NetEase and The9," said Kou Xiaowei, vice director of GAPP.

The firms preparing to float overseas had annual profits of 500 million yuan (US$64.95 million) each, said Kou, who didn't name the companies.

Industry insiders said the firms with plans for initial public offerings overseas include Shanghai-based Zhengtu, 9you and Beijing-based Kingsoft.

"The new stars will make the market more diversified and the top three's combined market shares will drop," said Hou Tao, an analyst at Shanghai-based iResearch, an Internet consulting firm.

Kingsoft has merged its word-processing and anti-virus divisions and it has consolidated the game business for the coming IPO, a source who declined to be named told Shanghai Daily.

Chinadotcom also said recently in Shanghai it will invest US$300 million to purchase game firms and float shares of its game business in 2008.

Chinese online game market revenue reached 7.6 billion yuan in 2006, giving a 60 percent growth year on year, according to iResearch.

"The anti-addiction system will launch next month on schedule and it will bring a positive influence to the market," said Kou during a conference at China Digital Entertainment Expo & Conference (Chinajoy) 2007.