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1、Business models and operational issues in the Chinese online game industryIan MacInnes *, Lili HuSchool of Information Studies, Hinds Hall, Syracuse University, Syracuse, NY 13244-4100, United StatesReceived 27 January 2
2、005; received in revised form 29 March 2006; accepted 13 April 2006AbstractThe rapid growth of Internet usage has enabled many new online communities to develop. A particularly interesting phenomenon that has arisen thro
3、ugh Internet communities is the virtual world (VW) style of online game. This paper iden- tifies the challenges that developers of VWs will face in their efforts to find viable business models. This is a single case stud
4、y of China as an exploratory project to determine the issues surrounding business models for virtual world developers and users. The paper discusses the feedback effects between broadband adoption and online games as wel
5、l as issues such as culture, history, Waigua, private servers, virtual property trade, developer control, governance, and regulation. In spite of the profitability of major Chinese VW operators, close observation of the
6、Chinese case suggests that even the most suc- cessful VW operators are still in the early stages of their business model development. ? 2006 Elsevier Ltd. All rights reserved.Keywords: Virtual world; China; Business mode
7、l; Online game1. IntroductionAs the Internet continues to grow worldwide, Internet-based channels have become increasingly important for communication. As a result, online communities of many forms and for various purpos
8、es have developed and have enabled people to work, socialize and entertain themselves. Among the many types examples of online communities, a particularly interesting phenomenon is the virtual world (VW), a persistent sy
9、nthetic environment where people communicate with each other using a virtual persona, often called an avatar. VWs are a type of online game that can have thousands of people involved and potentially interacting at the sa
10、me time. The vast majority of popular online games in China are VWs.MacInnes (2004a) provided an overview and framework for understanding the VW phenomenon. It is now important to supplement this work through case studie
11、s. We chose to begin with a single case study of the0736-5853/$ - see front matter ? 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.tele.2006.04.002* Corresponding author. Tel.: +1 315 443 4101; fax: +1 315 443 58
12、06. E-mail addresses: imacinne@syr.edu (I. MacInnes), lhu@syr.edu (L. Hu).Telematics and Informatics 24 (2007) 130–144www.elsevier.com/locate/teleBecause of the revenue streams that virtual worlds are now able to generat
13、e, this study focuses on the busi- ness model aspects of those communities. Business model literature has grown rapidly over the past five years and is helpful in understanding the challenges that VW developers and users
14、 are likely to face in their attempts to develop profitable businesses based on virtual property. Contributions from scholars in business models can be divided into three areas: studies that focus on single factors to hi
15、ghlight their importance, studies that iden- tify several elements that make a business model successful, and studies that identify business model components. One of the reasons why we want to focus on the business model
16、 aspects of this industry is because of its large economic potential. Even with its relatively low adoption percentage in China, the industry is already generating large revenues. We thus want to understand how the indus
17、try has evolved and how it will be able to generate further growth. The business model literature is quite rich and sometimes overwhelming. In many instances scholars have tended to emphasize some aspects over others and
18、 many of their models have involved static analysis of the components that the authors believe affect the economic success of companies. These sta- tic models are, to a certain extent ineffective when we are analyzing an
19、 emerging industry, as they have to go through many challenges before they have a viable business model. MacInnes (2004a) provides a four stage dynamic business model framework that takes into consideration the dynamic a
20、spects of an evolving industry. The model was designed specifically for emerging industries such as the Chinese online game market.12.1. The dynamic business model frameworkThe dynamic business model framework was design
21、ed to take into consideration the evolution that busi- nesses experience as they become more knowledgeable about their industry. This is particularly true for busi- ness segments that are just emerging as is the case wit
22、h virtual world game developers/operators. The model is composed of four interrelated stages. Fig. 1 shows the different stages. The factors that affect the success of a company’s business model at its early stages are d
23、ifferent from those affecting the business at a more mature stage. In the first stage technical issues are of greatest importance. In the second stage environmental factors such as law and adoption should be considered.
24、In the third stageFirst stage: TechnicalSecond stage: EnvironmentalThird stage: RevenueFourth stage: SustainingFig. 1. Dynamic business model framework for emerging technologies.1 See MacInnes (2004) to view a detailed e
25、xplanation of the model. It should be noted that the model was developed to account for the evolution that emerging industries experience as they grow. This is particularly prevalent in the information fields where techn
26、ologies appear and then the business model develops. The model incorporates the factors that other authors have identified but puts them in a dynamic context.132 I. MacInnes, L. Hu / Telematics and Informatics 24 (2007)
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