Game firms cash in through selling game time, virtual items and advertising. Some firms adopt the mixed-business model.

"The capital sector to me is a game's design quality, not the business model," said player Alan Wang, 26. "I won't choose the dull games even if they are 100 percent free."

The impact of the "free lunch" is that the game user base has surged in China. It grew 11.2 percent year-on-year to 17.81 million in 2006.

The figure grew less than 10 percent in 2005 when charges applied for most games, according to Beijing-based CCID Consulting, a research firm under the Ministry of Information Industry.

Game types

"The MMORPG (massive multi-player online role-playing games) will dominate the market without any doubt, so the top three firms will keep their leading positions," said Chen Wen, an analyst at CCID.

Casual games, including online chess and poker, will grow steadily in 2007 because of limited profit margin, Chen added.

"I think the games with sports concepts will join the spotlight as the country hosts the Olympic Games," said Hou Tao, an analyst at Internet consulting firm iResearch.

Shanghai-based 9you.com, the country's No. 4 online game firm, will officially launch its Real Extreme Action, a soccer game. Meanwhile, it has imported a South Korean-made car-racing game, Ray-city Online, which has attracted more than 30,000 players in test conditions.

9you.com's income mainly comes from selling virtual items and advertising.

1

2

3

(For more biz stories, please visit Industry Updates)