Officially, China's Ministry of Culture and the Ministry of Commerce said that in-game monies "will only be allowed to trade in virtual goods and services provided by its issuer, not real goods and services." That could potentially put a damper on the burgeoning industry of accumulating in-game assets in World of Warcraft, then selling them for yuan, dollars and pounds to people with too much money on their hands.

The Chinese government also defined that "virtual currency" include "prepaid cards of cyber-games," which may be able to be cashed in for digital funny money.

According to a release from the two bodies, "using virtual money for gambling will be punished by public security authorities, and minors may not buy virtual money." The Chinese government hopes to curb gambling and illicit trade, as well as money laundering via virtual money.

China Bans Gold Farming [Information Week]

The man "kept talking incoherently about how to win his favorite computer games, even after being sent to a Beijing hospital ICU" on Sunday.

According to the report the man has been addicted to computer games since early in junior high school, but his condition worsened recently.

I wonder if there is something about the culture or politics of China that seems to make people more pre-disposed to game addiction there, or at least makes the results more extreme.

It could be an issue of the media in China writing more about the issue because it's become very high profile recently, but even if that were the case, I still think it's worse there than in other parts of the world.

Computer Game Addict Swallows Saw Blades [China Daily]

Net revenue was RMB265.20 million or US$39.06 million, a decrease of 34.6% from RMB405.25 million a year ago, mainly on lower online game net revenue, which was adversely impacted by adjustments made to the monetization features within ZT Online. Analysts expected revenues of $63.41 million for the quarter.

Gross profit declined 40.9% year-over-year to RMB212.5 million or US$31.3 million, and gross profit margin fell to 80.1% from 88.8% in the third quarter 2007.

Active paying accounts for online games declined 31.6% to 937 thousand, and average revenue per user dropped 4.4% to RMB282.1. Meanwhile, average concurrent users for online games rose 9% from last year to 543 thousand.

Wowee. The interesting thing here is in many Chinese articles I've read, players have cited 'cost' as a reason they are moving from WoW; clearly, some players are not spending less on domestic games. Even considering the drops in revenue and other indicators, sounds like Giant is steaming along — perhaps their unholy mix of 'illicit' MMO features being sanctioned really is just the ticket.

Giant Interactive Q3 profit falls; issues Q4 revenue forecast [RTTNews via PlayNoEvil]

Shanda (Nasdaq: SNDA) is being sued for RMB 11,000 in emotional damages by a gamer of its licensed MMORPG "Legend of Mir" for freezing the player's game account, reports West China City Daily. In addition to monetary compensation, the gamer is asking for the return of his virtual items. The Chengdu Jinniu District People's Court began hearing the case on Sunday, said the report. The9 (Nasdaq: NCTY) was ordered to pay court fees and return game characters and tools to World of Warcraft gamer by the Shanghai Pudong New District People's Court on August 13.

I know people are attached to their MMOs, but really. Emotional distress? Really? This sounds like one of those ridiculous lawsuits people always use to point out the flaws of the US legal system — clearly, China is not immune either. I'll be curious to see the outcome; as Steve at PlayNoEvil notes, this type of precedent could be really injurious to game operators.

Shanda Gamer Sues For Emotional Damages After Game Account Sealed [Pacific Epoch via PlayNoEvil]

In China, it's the glitzy cities that get the attention — Shanghai in particular is the city that garners the most attention in scholarship (and frequently in the press). I was somewhat relieved to see that this is not confined merely to China specialists, but game industry watcher types as well — the most recent 'China Angle' column at Gamasutra looks at games outside of the publicized hotspots, where large portions of the user bases are found. Giant Interactive, developer of Zhengtu Online, recently purchased a stake in one of China's largest social networking sites, in an attempt to grow their market. But that's not the only way companies are trying to acquire ever greater number of players, oh no:

Giant Interactive made a significant splash in China’s online gaming industry by pushing their game Zhengtu Online into the channel of second and third tier cities the way fast moving consumer goods company pushed food and nutritional products, using sales representatives at net cafes and shopping centers.

Their strategy was not surprising since Giant Interactive started as a nutritional supplement company prior to be a gaming powerhouse.

With the investment in 51.com, Giant will now continue to grow both their games and their reach deeper into hundreds and thousands of China’s urban centers that most Americans have never heard of.

Oh, Giant — definitely one of my favorite companies to keep tabs on. I'm looking forward to seeing the directions the Chinese market takes over the next decade; maybe we'll even see WoW toppled.

The China Angle: Reaching Into The Heartland Of China [Gamasutra]

Chengdu's Shuangliu county has arrested two virtual item and currency traders, surnamed Li and Zhang, focused on tapping out The9's (Nasdaq: NCTY) licensed MMORPG World of Warcraft (WoW), reports Chengdu Evening News. Police arrested the pair after Li reported Zhang for unfair revenue distribution. Going into business last August, the gold miners accumulated more than 20 employees with 20 computers to generate RMB 1.6 million in seven months of dealing.

Oopsies. I'll be nosing around for more on this story (like exactly what the pair was arrested for), but if any intrepid readers come across anything, send it my way. As Steve at PlayNoEvil notes, "Turn up the Irony Meter to 11. After all, with all of the complaints in the US about gold farming, it takes the Chinese to stand up and do something about it."

WoW Gold Miner Offers Himself Up To Police [Pacific Epoch via PlayNoEvil

In the promotional material, the company that offers this game is less coy about turning on the jingoistic rhetoric and pitching an anti-Tibetan line.

"We support the Olympics with our unique online game content against Tibetan independence," it says. "We provide new services for China's youth to vent their bilious rage."

Overt displays of rabid nationalism generally make me feel pretty uncomfortable, no matter where it's coming from — and I feel a little bad for GTA IV that the (English language) article went on to compare this MMO add-on to a little good clean fun on the streets of Liberty City.

Tibetans fair game in China [DNA]

I have a hard time imagining what possessed anyone to make this game. The board meeting probably went something like this:

President: OK guys, we have this terrible RPG engine for the Famicom. How can we squeeze more money out of it?
Developer: Well, Titanic has been popular with students studying English. What if we make a game based on the movie?
President: But how will it work? I mean, the only character you could play as would be Jack, and he dies.
Developer: Don't you see! An RPG where the player's character dies! It will be revolutionary!
President: Make it so.

Well, they made it so.

The result was the most unbelievably fucking awful game in history.

Prepare yourself, for tonight we board IN HELL! [CinnamonPirate via GameSetWatch]

Internet cafes have been repeatedly targeted for breeding juvenile crime and promoting truancy, despite widely ignored rules barring anyone under 18 from admission. Located in towns and small cities throughout China, internet cafes mainly offer online games that are popular among young people. Authorities have blamed the cafes for Internet addiction and for encouraging juvenile crime as a way to earn money to play online games.

First the problem was that kids were so busy playing WoW and other MMORPGs that they didn't have time for anything else; now the problem is that WoW's keeping them too busy ... with crime? Does this mean we'll see a related drop off in suspect addiction 'treatment' methods?

China Targets Internet in Crime Sweep [AP]

Under the new regulation, the [GAPP] will postpone the examination, approval and licensing of foreign company products if the companies are sued or targeted for arbitration actions by Chinese online game companies.

It sounds to me like this is dealing with new products and WoW is safe from frivolous lawsuits for the time being - but this is still rife with potential problems, since many domestic games are introduced to China via partnership between foreign companies and domestic operators. The potential negative impacts on domestic companies if games are unfairly held up is huge; and some of the most recent lawsuits involving Chinese and foreign game companies have involved disputes over licenses and operations. Considering Chinese companies have proved they have absolutely no compunction about illegally operating foreign games outside set corporate agreements, I'm not at all convinced this will actually do anything in the long run other than encourage domestic companies to commit IP theft.

China Adopts New Regulations to Keep Out Foreign Online Game Companies [Virtually Blind]

In a sweep designed to "clean up young people's online environment," police in the southern Chinese border city of Shenzhen uncovered 563 illegal Internet cafes, Xinhua said. The crackdown netted 1,407 computers, while 7 people were arrested and nearly 5,000 Internet accounts closed.

Shenzhen police in one case discovered 30 computers crammed into a 40-square meter room.

Other unregistered establishments were tucked in the upper floors of otherwise empty buildings. "This shows the difficulties the law enforcers face," Xinhua noted.

Promising more crackdowns and more laws, the Chinese government is attempting to bite back. I'm just unconvinced it's actually going to do anything other than flush out some illegal businesses and further bloat the bureaucracy.

China flags crackdown on "undesirable" online games [Reuters]

All the quests that I completed were all of the kill 5 of this, kill 10 of that, collect 4 of these by killing 4 or more of those sorts, excluding quests sending me from one NPC to another. Stock MMO quests.

One other quest some might consider an exception, was the become-a-soldier-quest itself, after killing 7 of something, being required to swear that my little guy would fight to the death for the Imaginary Goddess.

But most people wouldn't consider that an exception, and would instead say, "What now? I didn't really read it." Stock MMO players.

One of my wishes for 2008? That gems like this and Shanda press releases continuing flowing freely from China.

How I Spent My Vacation: Elfing [via Worlds In Motion]

The main Southern Weekly article on ZT Online follows a gamer as she first becomes interested in the game, through her rise to power, and her eventual disillusionment with the money-sink it had become.

Woven into the narrative are descriptions of the often shockingly brazen tactics ZT Online uses to soak the "RMB gamers" who would rather spend money than grind out levels. The picture resolves into that of an online casino dressed in the trappings of an adventure game, and Shi Yuzhu [the brain behind ZT] ends up looking a lot like a shady used-car salesman.

It's a really, really great (if somewhat lengthy) article from a number of perspectives - it's one of the better mainstream media articles I've read on gaming, though not without its flaws. But as the PNE commentary points out, the fascinating thing is how it turns a lot of ideas about 'good' MMORPGs upside down ... and is reaping major rewards. From the sounds of it, I doubt we'll be seeing it Stateside, but one never knows.

Gamble your life away in ZT Online [Danwei via PlayNoEvil]

The gamer surnamed Zhang discovered six virtual items, worth more than RMB1,500, missing from his game account on November 22, 2006 and contacted Shanda regarding the disappearance. Shanda said that the company had taken the items in accordance with a police investigation regarding the sale of stolen virtual items. According to the report, Shanda failed to follow police instruction and return the items after the investigation ended. Having spent much time away from the game, Zhang said he plans to take Shanda back to court. This time he plans to sue for the RMB150,000 he claims to have spent in the game during the past five years. Zhang sued Shanda in the Hunan Qiyang People's Court.

Over $20,000 USD seems excessive, to say the least. Will it fly in a Chinese courtroom? I guess we'll find out.

Shanda Pays For Stealing Gamer's Toys [Pacific Epoch via PlayNoEvil]

It is a very sad story. Both the victim and perpetrator are not from affluent families, are not particularly well-educated, and didn't appear to have great prospects in Chinese society. World of Warcraft, operated by The9 (Nasdaq:NCTY) in China, and other MMOs are a great escape, as is obvious from the tens of millions of Chinese playing in these virtual worlds.

Good thing for Blizzard and The9 that China's legal system is still developing. If this happened in the US no doubt the victim's family would hire an ambulance chasing lawyer to sue Blizzard for millions, claiming that somehow Blizzard, rather than the parents, was negligent.

According to an article in the Beijing News [新京報], the 'fire mage' purchased gasoline 5 days prior to the event, which sort of takes the edge off that 'spur of the moment' idea. Furthermore, the interview a Beijing News reporter had with the 'fire mage' was downright disturbing in parts - nothing like sound bites like "[the feeling of watching fire and people burning] is very addictive, very happy!" to make someone come off as perfectly sane. And all this over a schoolyard fight between 17 year olds.

模仿"魔兽"火烧同学 [Beijing News via billsdue]

FUZHOU, China, Dec. 7 /Xinhua-PRNewswire-FirstCall/ — The first domestic
online game (Warlords Online) based on the film of the same name, which is
jointly produced by Netdragon (Netdragon Websoft Inc. (SEHK GEM 8288) and
Central Motion Picture Corp., will be tested officially for the first time on
December 13. China's traditional recreational industry and emerging digital
recreational industry will greet the first annual show of a landmark work, and
it will become another important milestone in the development of China's
recreational industry.

Warlords, directed by Chen Kexin, is an epic war film represented by Jet
Li, Andy Lau, Takeshi Kaneshiro and Xu Jinglei. It profoundly depicts love
between brothers and lovers.

Warlords Online ( tmz.91.com/ ) is the first large and realistic
Oriental epic online game in ancient costumes in China based on the Chinese
night-errant culture. Thanks to the efforts of NetDragon, Central Motion
Picture Corp. and the team that produced the film Warlords, it vividly
reproduces a disorderly society full of love and hatred under the background
of the late Qing Dynasty by the super-realistic technique.

Warlords Online creates the unique opposition camps of the government and
bandits and has a bodyguard system that is composed of as many as one hundred
kinds of bodyguards' occupations, almost all in the Qing Dynasty. Especially,
it builds the first pure "brother (sister)" system in online game history, and
players can truly experience the meaning of the eight characters: share
happiness and share difficulties. Moreover, it contains exciting super-large
battles for attacking and defending cities to let players bring their wisdom
into full play.

In eager expectation of numerous players, the game was first tested
internally on November 30 at 3:00pm and the response was very enthusiastic. In
order to satisfy the needs of a great number of players, the game operator
decided to increase the activating code for internal testing by a wide margin
at that time. The enthusiasm of players not only shows the star effect of
Warlords, but also reflects the excellent brand image of NetDragon in the
online game field.

The time for developing Warlords Online was very short, but the
requirement for its quality was very high. "For NetDragon, it was a challenge,
but an opportunity even more!" Liu DeJian, Chairman of NetDragon, noted: "This
strategic cooperation between us and Central Motion Picture Corp. breaks
through the conventional development pattern of the traditional recreational
industry and emerging recreational industry and shows the new development
direction for the game industry in particular. The success of Warlords Online
is just a beginning and we expect there will be more and better online games
adapted from films, TV plays and novels in the future."

In a lawsuit filed by CDC Games last week, the company claims MGame has not been providing adequate technical support for "Yulgang" and that it has not been supporting CDC in its efforts to combat piracy.

In response, MGame said it has "hired and dispatched key personnel to sincerely provide support to address those issues."

MGame Chief Executive Yi Hyoung Kwon said in a statement the company "will provide constant and stable services for 'Yulgang' in China with a new partner sometime soon,"

I love reading this stuff - it's like a soap opera, but way better and with a lot more money at stake. You can't make this stuff up. I can't wait to see what happens if MGame and CDC don't manage to iron this out, and MGame goes shopping for a new Chinese operator.

MGame Responds to CDC Lawsuits [Forbes]

BEIJING, Oct. 18 /Xinhua-PRNewswire/ — Beijing Perfect World Network Technology Co., Ltd. (''PW Network'' or ''the Company'') today announces that the grand prize winning "Perfect World in the Eye" (''the Film'') of the first Company sponsored "Perfect World" micro-video originality competition has successfully showcased on China Central Television's film channel. The Film, titled "Love Cinematographing," first aired at 21:30 on Oct. 9, 2007.

"Perfect World in the Eye" tells the story of an ideal and harmonious world through the eyes of a child. By using the technique of compare and contrast, the Film explores a utopian society according to a pure child's opinion. The Film unifies the three main components, "Love, Happiness and Green," with artful cutting techniques, and uses the child's joyous smile in the final scene to point out the main theme of the Film — this may be the perfect world in everyone's heart!

The first "Perfect World" micro-video originality competition began on July 15. The activities organizing committee received a significant number of applications since the competition began. After the judging process, which also took public opinion into consideration, Clang Clang's, "Perfect World in the Eye," was awarded the competition's grand prize. The "Duanyu Series" made by Snow and Moon workroom, "Perfect World" made by Chenjunguang 06, "Houyi Fires Moon" made by Tianyizhiwen, and "Accident of Filming Perfect World" made by Hongchun gg were also awarded prizes.

The airing of the winning film on CCTV's film channel not only demonstrated the improvement of game players' video-making skills, but also the substantial amount of attention the event has received. The screening also exhibited the influence of PW Network, and the Company's ability to improve both the game players' tangible and intangible abilities through its self developed online games. The Company will continue to hold this kind of event in the future and enable game players to observe their favorite games through fresh and various angles and completely display the development and fascination of domestic games.

To review the winning videos in this competition, please go to: http://hot.ku6.com/world2 .

... the "ban" has not achieved satisfactory results. Research indicates that most who surf the Internet or play games in the university computer rooms or net bars around the universities are freshmen. According to a poll of 15 university students, after they finished the first year most bought computers and began to spend a long time playing games. Twelve of the fifteen have failed exams at least once and nine of them claimed that they bought computers specifically to play games. They also said that a large number of boys are obsessed with the Internet.

I do remember from my short time at Shanghai's Fudan University that curfews were adhered to and there wasn't much opportunity to spend 20 hours in a fit of WoW fever. However, college freshmen across the globe manage to flunk out in a variety of creative ways, and I'm in the camp that has doubts that banning personal PCs for freshmen is going to make a dent in the proportion of students too careless to get it together.

Freshmen banned from owning computers [china.org.cn via Ars Technica]

Though the rule is often ignored, Chinese gamers who want to play video games at Internet cafes are expected to register using their state-issued identity cards. These and other restrictions over the years have been part of what critics describe as a larger plan to censor the dissemination of materials deemed too racy or controversial by the government.

The larger etchings of this supposed campaign were further revealed just last week when an article in the government-owned Shanghai Daily reported on the blocking of more than 18,400 "pornographic and indecent" Web sites. Although sites were closed ostensibly to prevent pornographic material from being viewed by minors, angry reports soon began to circulate in the blogosphere that many personal blogs had also been blocked in the roundup.

Censorship in China is a touchy issue, but the wider ramifications of government control of the gaming industry is an interesting question - will the central government ramp up controls since it appears the ones introduced this summer aren't working so well? In the world of MMORPGs, what's next after insisting skeletons be clothed in flesh? What's the landscape going to look like this time next year?

Chinese Crackdown on Gaming or Censorship? [NBC News World Blog]