Online gaming in China saw a 61 percent revenue increase in 2008, buoyed by a 26 percent increase in gamers who are spending more, says a new study from research firm Niko Partners. Niko Partners' new report, whose results largely concur with a similar one recently published by Pearl Research, says China saw $2.75 billion in revenue from online games in 2008. Particularly, online games in the region continue to thrive on the culture of internet cafes, of which China has 170,000 for a total of 23 million PCs. Most of the revenue in 2008 -- 77 percent -- came from MMOs, with the remaining 23 percent accounted for by casual games, a segment that's seeing expansion thanks to the rise of social networking sites and web games. Console sales are still climbing, notes the report -- although they're entirely illegal. There's room for further growth, according to the firm: The Chinese online game market will reach $3.8 billion this year, and is expecting to grow at about 26.4 percent a year for the next five years -- and will show revenues of $8.9 billion in 2013. "Niko’s conclusion is that China’s online market has plenty of room for growth in the next five years, and much of that growth will come from beyond the major metropolises where the number of Internet cafes, home PC penetration and Internet usage are all on the rise," says managing partner Lisa Cosmas Hanson.