Based On The Theory Of SCP Paradigm Study Of China's Online Game Industry

In this essay, I attempt to apply the economic industrial organization theory to make an empirical analyze of the online game industry for two main objectives:firstly, I am intend to analyze the state of domestic online game industry (market structure, market conduct, market performance, etc.) by the means of the industrial organization theory, making optimizations recommendations; secondly, I plan to verify the applicability of the industrial organization theory to culture industry, Especially the content industry. The main contents are included below:(1) The online game has become an important industry in the culture and entertainment industry. The2010global market size of＄15.53billion; China's market size in2010to32.74billion yuan, has far exceeded the established cultural and entertainment of film, audiovisual, and periodicals.In China's online game industry, the operator is the subject of the market, and the R&D enterprise has limited market influence because its being a part of the operator or its small scale. Owing to the development of the online game industry, the world-class network enterprise such as Tencent, Snda and Netease arise in our country. China's online game products are large in quantity, but uneven in quality, the homogenization is more serious. Previously, the import products were dominant in the online game market of our country, but now it shares the market equally with the products research and development independently.(2) China's online game market structure has formed the modern market structure type that the oligopolistic firms led by firms of all sizes symbiotic.2010CR4is65.8%, CR8up the82%, the HHI value of1410.Although each online game are different products, because of their similar design patterns and ideas, the product differentiation are not great, the homogenization is more serious, and it can not fully meet the diverse spiritual needs of gamers. The surface of market barriers is not obvious, in essence, there is a higher market barriers. (3) China's online games market is controlled by several oligarchic, and the order of the market structure is comparatively stable, the competition is still fierce. Reflecting in market conduct, the free system applied by Shanda has changed the profit model of online games businesses for small businesses have created an obstacle to profitability. In market expansion, the performance of the leader corporate is more modest, otherwise, the new enterprises and small businesses have radical performance and even irregularities. To consolidate the existing position, leading companies conduct a series of mergers like acquiring research and development enterprise to increase the competitiveness of their products; expanding scope or geographical areas to increase their influence and so on. As the relative stability of the market order, more and more coordination among enterprises, price convergence, product conspiracy, platform sharing and other forms of coordination and cooperation is increasing.(4) The online game is a high-profit business, the independently researched operator's gross margin is above50%. However, the average profit of online game industry is not such high. According to statistics, the profit-making enterprises accounted for only about15%, most enterprises are losing or getting losing, they are primarily large number of small businesses. The online game industry is an industry with the requirement of the operating scale, small R&D team, large upfront investment and low marginal cost. As China's population base, the leading online games companies operating the enormous number of users, which is so far ahead in the world, also the world's largest online games company, and thus get substantial revenues and rocket-high profits. In view of the advance of the industrial technology, although the online game industry in our country is developing fast and fully launched, it is not obvious in the advances of technology, especially the core technology, it almost has no progress. As the second-largest market of online game in the world, it is an extremely abnormal phenomenon. Therefore, in general analysis, China's online games market is a poor-performance market. In the market, a few large corporations plundered the vast majority of profits; the advantage resources were laid aside and did not conduct their uses efficiently; the industry needs to be adjusted and regulated.(5) The online gaming industry is not only itself has a considerable economic benefits, but also led many related industries, to promote the progress of IT technology in graphics processing, security, artificial intelligence. At the same time, it is a new art form, an important tool of mass entertainment, but also a cultural heritage and the spread of the media carrier.The cultural industry is one of the industry which particularly affected by government regulated. Although online games industry in our country is completely market-oriented operation, it could not separate from the government's special regulation and restriction. Because the law on the aspects of online game is not complete and the legislation is lagging behind, the regulatory system for online games industry mainly focused on the administrative rules and regulations, including both the government's macro regulation and control and the strict restraint by various departments; both the policy support and the restriction in practical operation. The overall performance with large number and chaos, and there is no long-term planning, but only short-term response.(6) For the better development of the online gaming industry, this study suggests that measures should be taken from the following areas:On the aspects of management, it should establish a game classification system as soon as possible to distinguish between different groups of people; the content of online game must be under strict censorship to make the game healthy and well; the regulated management of internet cafes should be enforced to prevent juveniles from entering internet cafes; the anti-addicted system must be fully installed in the game to carry out the addiction prevention in technology; and the self-regulation in this industry is to be strengthened to maintain the industry order in the long-term development.On the aspects of regulations, the positioning of the industry is to be clear, so as to control the scale of development; speed up the legislation of online game industry to improve the efficiency of regulation; make definite divisions of responsibilities to strengthen the coordination among sectors; increase the intensity of regulation to improve industrial efficiency and other methods. Development in the industry should take advantage of tax regulation and control industry abnormal profit distribution mechanism to restrict imports of foreign online game products, to support its product development.(7) This study suggests that the SCP theory of industrial organization is only partially applicable to the content industry research, as well as part of the theory is not fully applicable to the content industry,Such as technological advances, content products "winner-take-all" monopoly judgment, as well as the content industry production scale.