Niko Partners Issues Report on Outsourced Game Development in China in 2006

FOR IMMEDIATE RELEASE:

San Jose, CA - July 31, 2006 - Niko Partners, a leading market research and consulting firm for the Chinese videogame industry, today announced results from its latest report concerning outsourced game development in China. According to Niko, the cost savings and need to augment development staff is what drives most publishers or developers to outsource some of their work. The Niko survey of 20 outsourced game development studios in Shanghai and Beijing identified the cost savings to be in the range of 40-60% lower than development costs in the US or Europe. The results also indicate that the market for outsourced game development is growing rapidly thanks to publishers and developers increasingly turning to China for help with mostly artwork-related projects, which currently puts demand for outsourcing studios in excess of supply.

"With the high production costs of current and next generation titles in 2006, outsourced development of videogames is seen as a strategic way to offset high costs and large scale labor requirements," said Lisa Cosmas Hanson, managing partner of Niko Partners. "As Chinese developers continue to improve their skills across all game platforms, the country has become the primary center for outsourced game development globally."

The Niko report noted that fierce competition for talent and good projects will soon lead to consolidation and will allow true leaders to emerge among the developers. The report also stated that there has been little design and complete development done in China so far, however, with talented professionals and a game centric culture that is expected to change over time.

Hanson continued: "Understanding how to identify and work with a good studio can be the difference between a completed job and a job well done. China is an emerging market, with many talented development studios. In time, this market will evolve even further, moving beyond artwork and programming to encompass all aspects of outsourced international game development."

In addition to ongoing trends, the report focuses on several key market considerations such as what to look for when selecting a studio, the advantage of China compared to other country markets, costs and risks associated with outsourcing game development in China, and measures to secure intellectual property within studios. The report, which includes an overall assessment of the outsourced development landscape, is further highlighted by a directory of 25 premiere studios handling outsourced game development.

The current research report is selling for $2,950 US and is available by contacting Niko Partners at +1.408.354.0888. More information on this report or previous reports such as The 2006 Chinese Videogame Market Study issued by Niko Partners in April 2006, may be obtained by emailing Niko Partners at info@nikopartners.com

ABOUT NIKO PARTNERS

Niko Partners was founded in 2001 as an international business expansion consulting services firm for the multimedia software industry. Since 2003, we have conducted and published primary market research on the China digital entertainment market, both in the form of syndicated reports and as custom research studies. We also execute market-entry strategy projects using research and our extensive Niko Network of associates throughout China. The goal of the research and strategic advisory services is to help digital entertainment industry clients understand the market, strategically enter or expand market share, and continue to profitably grow within China. The company is based in Silicon Valley, Shanghai and Beijing.

For information on the study, please contact:

Lisa Cosmas Hanson

Managing Partner

Niko Partners, LLC

408-354-0888

lisa@nikopartners.com

or

Eric Gonzalez

Account Supervisor

Kohnke Communications on behalf of Niko Partners

415-777-4000

eric@kohnkecomm.com