Hong Kong’s highly developed telecommunications and technology infrastructure allows its digital entertainment and gaming industry to prosper. Hong Kong consumers embrace digital entertainment products from all over the world. This of course has been aided by the Hong Kong government’s many initiatives to help the industry prosper, including the US$2 billion Cyberport project in Southern Hong Kong, which was meant to create ‘Hong Kong’s own Silicon Valley.’ Indeed, the nature of Hong Kong consumers and the ease of access to technology give the digital entertainment industry much potential for growth. Hong Kong has been at the forefront of video game technology, with a very large market of video-gamers that has grown over the years. U.S. companies can take advantage of this potential and sell their products and services to this ever-developing industry. They can also use Hong Kong as a platform to market their products into the lucrative Mainland Chinese market.
Video game consoles are a common sight in Hong Kong residences. It is in fact not unusual to see more than one console in a typical living room in Hong Kong. With little open space and few outdoor alternatives, many people in Hong Kong prefer the excitement of video games within the confines of their residences. Video or console games are very popular among children and teenagers. In addition, many families in Hong Kong only have one child, giving the child more attention, care, and most importantly, money. Parents are often willing to spend a lot of money on their children, and video game consoles are prominent purchases from a very early age. Console games continue to do well in Hong Kong and are maintaining their status as one of Hong Kong’s most popular leisure activities. An Xbox 360 system costs HK$2,499 (US$320), a Playstation 3 system costs HK$2,880 (US$369) and a Nintendo Wii system costs HK$2,200 (US$280). These figures only cover the console price and do not include the spending on accessories and software games.
Mobile or portable game consoles like NDS and PSPs are also extremely popular in Hong Kong. Children, teenagers and adults alike play their mobile game consoles while commuting to and from school and work. As a result, there is indeed huge potential for growth in this sector. In Hong Kong, a NDS costs HK$1,299 (US$166), and a PSP costs HK$1,380 (US$176). Again, these prices do not include peripherals such as memory cards and games. Games cost between HK$250 and HK$400 (US$32 to $51).
Mobile phone games are increasingly popular in Hong Kong. This is partly due to the fast-paced lifestyle as well as the high mobile penetration rate in Hong Kong. Hong Kong has an extensive and sophisticated mobile telecommunications network. 3G mobile technology is common and inexpensive, and WiFi is readily available in many public locations (there are about 6,800 WiFi hotspots in the Hong Kong region). Cell phone signals are also reliable and highly developed – users can speak on cell phones in the subway, in underground car parks, in elevators, basements and tunnels. As a result of this advanced mobile network, most Hong Kong residents (including many children) possess a mobile device (including cell phones, BlackBerrys, PDAs). Hong Kong’s mobile phone penetration rate is 154.4%, which means that there are 154.4 mobile phones per 100 users, or over 10 million mobile phone sets for a population of 7 million. Consumers are constantly pursuing the latest technology gadgets and thus it is common to see consumers changing mobile phones every few months. This has created huge business opportunities for mobile phone game provider as the ever-changing consumer demand in Hong Kong has called for constant upgrade on existing games as well as the creation of new games.
The successes of Hong Kong’s online gaming industry are highly dependent on its telecommunications infrastructure. Broadband internet access is widespread and is readily available to almost all Hong Kong households. It is relatively inexpensive and therefore the penetration rate is high: there are 4.8 million internet users in Hong Kong (representing a 71.4% penetration rate), of which 1.9 million are broadband users. This has made Hong Kong the second-highest internet penetration city in Asia; marginally lower than Japan’s 73% and higher than China (15.8%), Singapore (58.6%) and South Korea (70.1%). Consumers can receive unlimited broadband access for as low as US$19 per month. As a result of Hong Kong’s bustling internet industry, online gaming is popular.
However, online gaming is still a relatively new idea to Hong Kong consumers. Despite the drastic increase in the number of cyber gaming cafes, the market still needs time to develop. Hong Kong is working to develop its technological know-how and its creative industries. Hong Kong currently has just over 20 local online game developers, most of which target local Hong Kong and Chinese consumers. Most of Hong Kong’s online games are developed by Chinese or Korean companies, with a very limited American presence in the market.
By Fanny Chau & Jonathan Hui