internet - Netease, the only real winner in the gaming industry

Shaun Rein gives for Seeking Alpha a thorough overview of the Chinese gaming industry, now valued for 2007 at an estimated 600 million Renminbi, up 25 percent compared to last year. While there is a lot of money that can be made in this industry, the long term perspective looks grim:

Most game companies in China like Shanda, Netease (NTES), or The9 (NCTY) bank much of their revenue from just one or two games that have limited life spans of one or two years. Investors hope that the company they back can develop or license the next big hit before old hits go stale. Or the hope to exit at the right time and make a ton of money as most of Shanda’s venture capital investors did.

Only Netease, with a successful managing team and at least doing some efforts to develop new games, is getting a reasonable positive review.