Niko Partners forecasts that the Chinese online game market will reach $9.2 billion by 2014, driven by social networking sites and expanding infrastructure.
The San Jose, CA-based research firm predicted that this year, online gaming in China will reach $4.5 billion. 2009 saw revenues of $3.57 billion.
"While the global economic downturn hurt video game publishers in much of the world, China’s online game industry reflected no pain in 2009 and gamers continued to embrace online games as the best inexpensive source of social entertainment available," said Lisa Cosmas Hanson, managing partner of Niko Partners.
She added, "While the era of online gaming is generating lots of interest and growth opportunity in the West, China is one of the countries where online gaming is a well established market segment that extends its reach to more and more Chinese consumers every year."
The report also said that the Chinese gaming market grew and continues to grow "despite a harsh regulatory environment particularly for foreign games, and a gamer base that has become increasingly discerning about game quality."
Niko Partners said there were 68 million online gamers in China at the end of 2009. That number will grow to 141 million by 2014, the firm said.
The company's latest annual review of video games in the region also said that Chinese gamers prefer the free-to-play model, in which game makers derive revenues from users' virtual item purchases.
In addition, the survey found that 63 percent of gamers increased their spending on online games in the past year, and 88 percent of gamers surveyed play games on social networks.
Niko Partners noted the strong social aspect tied to China's internet cafes. Even gamers with PCs at home often visit these locations to meet up with friends. "At least 65 percent of gamers use internet cafes at least part of the time," Niko Partners said.