Game Exhibition in Manchester

Digital games are becoming increasingly integrated into people’s lives as a form of entertainment, education, work, and sport through different communication technologies and devices. In HK, there are over 600,000 active online gamers and every teenager owns 2.7 handheld games on average. These figures exclude students completing assignments through educational online games at school and adults who indulge in handheld and mobile games on public transport. Games’ popularity is also demonstrated by the large number of visitors (400,000 in 2008) who swamped HK’s Annual Online Game show. Games’ popularity leads to their social impact. The local media often reports the negative social and psychological effects of games including game addiction, social conflicts triggered by online disputes, alienation, and sexual, violent, and racialized contents.

Despite games’ popularity and social significance, no research has been conducted on HK’s game industries. Scholars have for too long misconceived games as marginal and frivolous. In the present, games are in fact one of the few most dominant entertainment forms in developed economies, one of the most lucrative creative industries, and the most profitable IT application. The Center for Cultural Policy Research’s (2003) baseline study of creative industries, commissioned by the HK government, devoted only a few paragraphs to games. Several studies were funded by the government to investigate the local popular music industries (one of which has Fung as the PI) and the film industries (one of which has Fung as a Co-I), but none of the funded projects specifically considered the local game industries. Only a few serious studies of game industries and gamers in HK have been made, nearly all by this project’s PI and Co-Is.

The game industries’ economic significance is also overlooked by policy-makers and scholars. The market size of gaming in HK is estimated by industry insiders to be around HK$1 billion, which exceeds that of music album sales; the number of game-relevant companies (mainly developing, publishing, and retailing) in HK has reached 2,800, which surpasses the number of film-relevant companies. There is neither cultural policy for developing the game industries nor government financial support in terms of investment and grants (through tariff, tax breaks and development funds). Despite the huge Chinese market adjacent to HK, there is no government plan for making business agreements for the cross-border export and co-production of games, whereas similar arrangements were made under the China and Hong Kong Closer Economic Partnership Agreement (CEPA) for HK’s film and service industries.

During the past decade business consultants and strategists have recognized that the game industries are extremely conducive to economic growth. See for example KPMG’s (2007) report on ‘The Video Game Market in China: Moving Online’ or DFC Intelligence Reports on online gaming. The recent experiences of South Korea, Japan, and China have proven this business insight. The annual game output reached US$ 5.4 billion in Korea in 2007, 29.4 billion in Japan in 2007, and 6.9 billion in China in 2008. In South Korea, the revenues of game industries have already surpassed those from any individual creative industry including its globally vaunted film industry. In Japan, the game industries constitute 0.67% of its annual GDP. In China, growth in the game industries was so rapid that from negligible beginnings it became a global center of game production in a few years. Japan and Korea have not only cultivated large internal markets (US$5 and 7 billion respectively), but have also become major global exporters of games, reinforcing their surplus in the global cultural trade and soft power influences. China has become the largest game market in Asia (US$15.3 billion just for online game) and is starting to export locally developed games to the world.

Investigation of the development of game industries and markets in different countries are therefore useful for HK. HK’s game industries urgently need the help of cultural policies, business models, regulation, and industry norms to propel them into the Chinese and Asian markets. In Korea, for example, the Korea Game Development and Promotion Institute constructed very extensive and successful policies in the past decade for developing Korean games, and the Asian Cultural Policy Network gathers scholars over the world to discuss the creative industries with Korean officials, industry people, and academics (the PI was invited in 2007). Korea has also implemented stringent protectionist measures to shield the local game market from global competition (and has recently abandoned it).

Game Festival in Beijing

Even though China did not pay particularly serious attention to the creative industries until the mid-2000s, it is still far ahead of HK in terms of designing policies for promoting and regulating the game industries. China has a designated bureau, the Electronic and Internet Publication Section of the General Administration of Press and Publications, to develop the industry. The State Taxation Administration is introducing new tax laws on game virtual property. Game-relevant legislation and numerous legal cases (e.g. Li Hongchen versus Beijing North Arctic) have emerged. In response to social backlash against online game addiction of students and highly exploitive games, China has designed anti-game addiction regulation other policies (Golub and Lingley, 2008; Guan, 2008). The state has also set up the National Online Game Publishing Project to encourage local cultural contents in games.

Apart from helping to achieving practical economic goals, this project makes an important theoretic contribution to the fields of media studies, globalization studies, and game studies. Firstly, its investigation of the political economy of game industries in HK and other countries will shed theoretical light on how the interplay of political factors (censorship, control, nationalism, protectionism) and economic factors (sponsorship, monopoly, trade) can affect creative industrial structure, cultural production and distribution, cultural products’ contents, and the values and lifestyle of those who consume the cultural products. Secondly, this project’s examination of the globalized production and reception of games will enrich the theoretical understanding of cultural globalization. This project will produce the first systematic study to approach from the angle of games a host of cultural globalization problematics including local reception, glocalization strategies, localization of game contents, global diffusion of games, and global game cultural asymmetry. Thirdly, this project’s focus on barely explored cases (i.e. HK and China) of game production and consumption will provide empirical bases for advancing current debates on a range of major theoretical issues in game studies including social impact of games, non-Western game cultures, virtual taxation, virtual property transaction, virtual-world governance, gamer activism, and game community formation, just to name a few.

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