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This again proves that the online game market is on song, and one of the most vibrant and profitable sectors in the country.

This report previews the Chinese online game market for 2007 and addresses the big questions: Which kind of game will become popular; what's the best business model; and who will be the winners and losers next year.

Free choice

Shanda Interactive Entertainment, which posted a US$30.8 million profit in the fourth quarter against a huge loss a year ago, is the first giant company to stop charging users for game time. Instead, Shanda charges users for virtual items in the games.

"The CSP (come-stay-pay) business model was successful in 2006, and we will enhance it in 2007," said Shanda's Chairman Chen Tianqiao, who also foreshadowed the launch of 16 new games this year.

Rivals NetEase.com and The9 will continue charging users for game time.

In China, about 80 games are free to users, compared with 50 paid games, according to IDC Corp, a US-based IT research firm.

"The free boom shows the diversified business models in the Chinese online game market," IDC said in a Tuesday report. "In 2007, competition will be enhanced and the key is who provides better value-added services."

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(For more biz stories, please visit Industry Updates)