Inside a Chinese Internet Cafe

Online Gaming in China, Part I from ChinaJoy 2008

A short distance from Shanghai's Rodeo Road - Nanjing Liu - lies an unassuming building which, along with many others like it, represents ground zero for online gaming in China. We're about to enter a Chinese internet cafe - or wang ba- and I'm wondering how in the world anyone knows that the fifth floor is a haven for the roughly 60% of Shanghai gamers who don't own a computer. From a street level both busy and narrow, your only clue is a few Chinese characters on the windows high above. "The same as in any large city," a smiling Alick Longhurst says, explaining that the location of hotspots like this spread more by word-of-mouth rather than in-your-face advertising - it's a fact whether you're in New York, London, Moscow, or Shanghai.

A Shanghai
Net Cafe

Aleck, an consultant to BigWorld Technologies and a longtime resident of Beijing, has spent a lot of time studying the potential of game development in China and Southeast Asia. Judging by the more than 1,000 skyscrapers over 20 stories tall, the vast majority of which were built in the last 15 years, business is booming. Those who travel here expecting to meet with a dreary, gray, thoroughly Communist Shanghai will instead meet with (as the ex-pats living big on their stronger foreign currency like to say) a cross between Times Square, Las Vegas, and pre-Katrina New Orleans on crack. And, with a resident numbers half the size of California's population in the city alone, you might add steroids to the metaphor as well.

It's a vibrant, exciting, and energetic place to be, and to a varying extent, China is bringing its own residents along for the ride. For example, the Internet infrastructure within China is among the newest in the world and should be the envy of many Western nations - the US and most of Europe included. A favorite pastime in Internet bars is to play a windowed game while you stream your favorite programming over the Internet... in high definition (HD). This, while the West thinks 400x300 YouTube is the latest and greatest. If you were waiting for the Communist twist, here it is: accessing sites outside China is much, much slower. Rumors abound of a government office staffed by tens of thousands of censors whose sole purpose is choke, monitor, report, and deny access to potential sources of "cultural pollution" and other forbidden activities, working especially to curb the wrong kind of information getting to the native population.

But such big-brotherly controls are embedded in the culture to such an extent that the Chinese don't seem to chafe against them, if only in prosperous Shanghai. And, as we arrive on the fifth floor I imagine, from appearances, that we could be in a net bar in South Korea or Japan. This isn't the Asian Internet cafe of our Western imaginations - it's not sweaty and dirty with piss-stained floors and half-malnourished game addicts peering deadheaded at washed-out monitors connected to noisy, ancient machines. Though it's easily 90 degrees Fahrenheit outside, the room is light, airy, and comfortably cool.

Games and streaming media
are on tap at these bars.

It's about 7 PM and I'm told the place won't really fill up for another few hours, though about a third of the hundred or so comfortably plush chairs are occupied. The patrons are mostly younger males either solo or paired off in twos - though a few females can be seen watching video and chatting with friends online, perhaps with the supplied webcam at each station. Only one was gaming. Everyone is entirely intent on what they're doing, but every so often they'll take time to chat and eat a little Chinese fast food (rice, vegatables in sauce, and maybe a little meat all in separate containers, and no, the Chinese don't use the septagonal folding paper containers they're famous for in the US). Smoking is permitted, likewise drinking in some Internet cafes. It's an escape from family life for the younger ones and escape from life's drudgery for those out of school, though many young professionals have taken up their parents' attitude on games as a spurious waste of time. Among industry watchers, a huge question is whether or not the current crop of Asians will continue to game into their late twenties and early thirties - much like the shift we saw in the US and Europe in the late nineties.

How the rest of the
world plays WoW

Of course, not all Chinese Internet Cafes are as pleasant as this one. According to BigWorld Business Development Manager Lei Guo, the steep price of licensing an operation such as this ranges in the millions per year, with 1 million RMB equalling about $142,000, though we should probably multiply that figure by three to understand the true financial impact to a Chinese entrepreneur. The increased regulation has broken up the publisher monopolies on certain Internet cafes and cafe chains - increasing the variety of games offered - but it has also started a wave of underground Internet cafes. These modern-day speakeasys pass on some of the savings to their customer, allow players to avoid showing their ID and filling out a form as is mandatory in licensed net bars, and are often the only viable option in less wealthy rural areas. Though the threat of any kind of crackdown is low, being found on the wrong side of the government can be risky, especially in a nation that imposes the death penality for narcotics violations.

With license fees like this, you might expect the services these net cafes provide to be a luxury, but the average gamer is under 20 and, alone, not much of an income producer. The prices are designed to get people in the door, with the cost of a station at about 5 RMB ($.71) an hour, or around 15 RMB ($2.14) for all-night access. The real money is made with the scratchcards available for sale at all net cafes. With total Chinese credit card ownership at around 0.4% of the country, virtual business is done almost entirely with scratch cards redeemed on numbered websites like 163.com or 17173.com (feel free to click, it's a little like dialing 9 for an instant eyeball cramp). One card covers a multitude of games (and cross media content such as videos, mobile, and music too), since cards are individuated by publisher, not by game. The scratchcard brand "QQ" is moving beyond games and media, reportedly becoming the most portable currency in much-balkanized Southeast Asia.

Dual-Boxing
Zhuxion

According to Lei, average player expenditures range from 100 RMB ($15) a month for Mo Shou Shije (you might know it as World of Warcraft) to between 400 and 1000 RMB ($57 - $143) for the free-to-play costume-rich Hot Dancer, with most popular free-to-play online games at around 200 - 400 RMB ($29 - $57). And, as an unintended consequence of China's much-criticized attempt to curb game addiction with three-hour time limits per game session, gamers jump from game to game and account to account, spreading the wealth and ensuring that even lesser-known games get some attention. One gamer was even dual-boxing two accounts of the one of the most popular Chinese MMORPGs, Zhuxion, a game as favored for its thoroughly Chinese take on Eastern Mythology as it is for the national pride it inspires. Zhuxion is the first truly 3D MMORPG made exclusively by a Chinese developer, Perfect World, with their proprietary technology. What's more, Zhuxion was made in half a year - that's less than a fifth of the development time of the average MMORPG.

As we left, I felt as though I'd come face to face with one node of a vast, sweeping system on online entertainment that is both powerful and portentious for the future of online gaming, in a country said to be wrestling with the raging tiger of its unfathomable but thorny prosperity. Wang ba gaming represents another load of questions about the difference between public and private, how culturally acceptable is gaming as a fundamentally individualistic pastime, what's the long-term impact on children, how can China take what the West has brought and make it their own, and so on. It's all part of the mystery of China, but with major developers and publishers like EA and Ubisoft opening studios in Shanghai, how it all shakes out may well begin to set a precedent for the evolution of gaming abroad.

• Part I: Inside a Shanghai Internet cafe (this page)
• Part II: Reinventing Account Security
• An Interview with an ex-Goldfarm Operator (coming soon!)