1. Online Game Industry in China Wu Chang Ming Chief Operating Officer, Junnet Online

2. Contents Some statistics and forecasts of the Internet industry in China Development history of online game industry in China Current industry segmentation Current industry participants Role of Junnet Online in the industry Junnet Online operation model and workflow Future opportunities of online game industry in China

3. Internet users in China

4. Online game Market Size and Growth Rate

5. Composition of Game Players in China

6. Online Game Players and Forecast

7. Geographical Distribution of Online Game in 2002

8. Current Demographics –Experienced about 4 years development, still expanding –Near 90 operators, over 110 games –Male-dominated (92%) –Age group : 16-25 (74.6%) –Sourcing, Sinalization, Distribution –Japanese and Korean Games

9. Stage of Development for online game Preparation  Before 1996  Initial Developing Mature  1997-2001   2002-2005   After 2005 

10. Online Game Industry Value Chain Development Localization, Operation, Marketing Distribution, Money Collection Outlet to consumers Game Developer Publisher Distributor Resellers/Shops

11. Popular Online Games in China Korea developed – 传奇 – 魔力宝贝 – 奇迹 (MU) – 龙族 – 精灵 –N-Age – 千年 China developed – 大话西游 2 – 不灭传说 Taiwan developed – 石器时代 – 金庸群侠传 Hong Kong developed – 古龙群侠传

12. Junnet Group Physical Distribution –Nationwide PC software and game distribution channel –Reaching over 10,000 outlets across the nation –Offices in Beijing, Shanghai, Guangzhou, Chengdu, Hangzhou and Xian Online Distribution –Nationwide PC online game distribution channel –Reaching over 9,000 cybercafes across the nation –Offices in Guangzhou and Chongqing

13. Role of Junnet in the industry Product Planning Strategy Packaging Positioning Promotion Distribution Development Sinolization Production QA Content Sales Channels > 90% Coverage Covering Nationwide Traditional Physical Distribution -7-11 Retail Stores -Guangzhou Postal Services Online Portal - Sina.com - Sohu.com - 800j.com - dangdang.com - joyo.com -Junnet Game Portal

14. Role of Junnet Online in the Industry Junnet Online Platform Game Supplier Game Supplier Game Supplier Game Supplier Supplying cards Payment Cybercafe E-banking E-Cards Cash Recharge Consumers

15. Future opportunities of online game industry in China –Brand Building –Diversification –Interaction between companies –MNCs Microsoft, Macromedia etc –Localization 金山、联众、盛大网络

16. Major Barriers for growth –Piracy –Poor quality connection –No clear government direction –Slow update progress –Keen competition from foreigners –Small scale and capital –Weak developing