Inside Perfect World Entertainment

North American gamers probably aren’t too familiar with Perfect World Entertainment, beyond their association with Runic Game’s Torchlight and the handful of Asian MMOs the company is trying to bring to North America. But this seemingly small MMO company is really quite big in China and analysts that pay attention to the sector (and like to invest money) have got their eyes all over Perfect World, despite its challenges - in China, of course.

Perfect World Co. Ltd. went public roughly 4 years ago and has beaten earnings estimates for most of its existence, carving out its own little niche in the lucrative online gaming space in China. Perfect World is no small player either, with a $2 billion market capitalization and a long-term plan to have a global presence - hence its North American and European operations. In the latest quarter the company raked in $86.4 million in revenue, compared to $55.9 million the same quarter last year. That’s pretty amazing for a company most North American gamers know nothing about.

But the company, like many others that have a business model that relies heavily on the lucrative Chinese MMO market, faces some serious challenges. Those challenges include government oversight and possible censorship of content, a rather crowded field of competitors (CDC Games, Shanda Games, The9, NetEase, etc.) and an unknown level of growth in China. Here and in places like Europe it faces the challenge of getting Western gamers interested in MMOs that are decidedly Asian in style. One secret weapon the company has is the upcoming Torchlight MMO, which will also serve the Chinese market if it can get by the Chinese Ministry of Culture.

In North America the company has 3 free-to-play MMOs in operation (Ether Saga Online, Perfect World International, and Jade Dynasty) as well as Runic Games single player action RPG, Torchlight. You can learn more about the company and all these games by visiting perfectworld.com.

Lord of the Rings Online gets Chinese Government approval

CDC Games has received final government approvals to operate The Lord of the Rings: Shadows of Angmar (LOTRO) in China. This enables the company to begin open beta testing of Turbine’s MMO later this week with commercial launch to follow one week later. The Chinese government has a strict approval process that requires prior approval of all games before proceeding into an open beta and commercial launch enviornment.

During the final phase of the closed beta test, CDC Games reported a registration number of 2.2 million users and a high activation rate during the last week of testing. Playing time steadily increased throughout the test resulting in about four hours per session.

CDC Games holds the exclusive distribution rights in China for The Lord of the Rings Online.

Chinese government cracks down on World of Warcraft

Activision Blizzard and top Chinese online gaming company NetEase continue to have problems in China as government regulators put the squeeze on the duo related to World of Warcraft. NetEase announced this week that the General Administration of Press and Publication (GAPP) has returned its application to operate the latest version of Activision World of Warcraft in the region due to “gross violations” of regulations.

The Chinese government run agency emphasized the point by posting a statement on its Web site demanding that NetEase suspend charging users to play the game, and started rejecting new account registrations. This news certainly puts into question World of Warcraft’s future in the lucrative region and also didn’t help both companies’ stock prices, which took slight hits.

Analysts familiar with the region believe that this is tantamount to a turf war, after Blizzard walked away from a contract with another Chinese online games provider The9, which the Chinse government apparently favors. While that is certainly a factor, the Chinese government has been cracking down on game content that it sees as undesirable. It especially enjoys cracking down on companies that have foreign investment; in Oct. the government banned many forms of foreign investment into the country’s online games industry.

And the news certainly isn’t hurting NetEase’s competitors; Shanda Games saw a bump of 3.1 percent, while The9 closed at 4.3 percent yesterday on the news. But it does hurt Western companies like Activision and EA, who want to crack the market and take some of the profits being generated there; the Chinese gaming market is projected to grow by 30 - 50 percent this year to $4 billion.

Speakers line up for GDC China

Game Developers Conference China (or GDC China if you like) revealed its lineup of speakers from noted industry players including Blizzard Entertainment, creators of World of Warcraft, Maxis, creators of Spore and The Sims, Dice EA, creators of Mirror’s Edge, and many more. GDC China is being presented by United Business Media’s Think Services, and will take place at the Shanghai Convention Center, October 11-13 of this year.

Chris Hecker will be presenting a session on the challenges and meaning of user-generated content in Spore, Colt McAnlis of Blizzard will be addressing the technical challenges of generating and affixing art to the massive terrains of World of Warcraft, and Tobias Dahl and Mikael Lagre of Dice EA will discuss creating a robust perspective for Mirror’s Edge, a game emphasizing fluid first-person movement and perspective. People from Activision, Take Two Asia, Volition and Ubisoft Chengdu will also be among the roster of speakers presenting talks.

Headlining this roster of speakers is Jordan Mechner, game designer, programmer, screenwriter, and creator of Prince of Persia, who will be providing a keynote lecture titled “Prince of Persia: 20 Years From Game to Film.” The full list of featured speakers at GDC China is available after the jump.

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Prince of Persia creator to keynote GDC China

Jordan Mechner, creator of Ubisoft’s Prince of Persia franchise, will deliver a keynote address at the 2009 Game Developers Conference China. GDC China - the game developer’s event hosted by Think Services and not the other event which has caused more than its fair share of confusion - takes place at the Shanghai International Convention Center on October 11-13, 2009.

Mechner’s keynote address will attempt to explore the success of the Prince of Persia series, as well as his own success as a game designer, programmer, director and screenwriter.

For more information about the Jordan Mechner keynote at GDC China 2009, visit www.gdcchina.com.

Gamania to operate Warrior Epic in China

True Games Interactive has signed a deal with Gamania Digital Entertainment to publish, distribute and operate True Games and Possibility Space’s MMORPG, Warrior Epic,in China. Warrior Epic is an online action role-playing game that uses a free to play model complete with a micro-transaction system for providing premium.

Headquartered in Taipei, Taiwan, Gamania has been operating massively multi-player and casual games in Asian territories since 1995. Gamania operates more than 30 games across the Asian territories including hits such as Lineage Online, MapleStory, Mabinogi, Kart Rider and more.

China’s Ministry of Culture approves GDC China

The 2009 Game Developer Conference China (GDC China) has become the first game development event to be approved by China’s Ministry of Culture (MOC) as part of the People’s Republic of China’s new process to approve organized cultural events related to Chinese animation, comics and games.

“The GDC is proud to be aligned with an organization such as the MOC,” said GDC China event director Meggan Scavio. “The steps the Ministry of Culture is taking are in the best interest of the developers and the future of the games industry. GDC China, being the first officially recognized game developer event by the Ministry of Culture in China is a win and step forward for the games industry in China.”

For more information on this year’s GDC China visit www.gdcchina.com.