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Virtual Currencies in China: Q Coins, Gold Farms, and Real Money Trades
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Abstract
In China' s online world, weak payment systems remain perhaps the greatest
obstacle to overall sector growth. With a banking system slow to reform, heavy
restrictions on PayPal-like online payment platforms, and little credit card
usage among China' s online population, virtual currencies have quickly found a
niche. These currencies cover a wide range of uses, from Q Coins, the standard
payment for countless virtual goods and services on Tencent' s QQ.com, to the
gold and credits in the virtual economies of China' s popular online gaming
sector.
Virtual Currencies in China is the first in-depth look at the virtual currency
phenomenon in China. In it we provide a comprehensive overview of all key
companies and currencies. We examine a number of recent reports - virtual
currencies threatening China' s official currency, "gold farms" producing and
selling virtual gold for real cash, virtual money laundering, and rumors of
major government restrictions in the near future - and separate fact from
fiction. Looking ahead, we forecast the potential for growth in virtual
currencies and which companies (and currencies) will come out on top.
Key Players Covered
Virtual Currencies in China covers the following key companies and interest groups in China:
- Instant messaging and portal-based virtual currency issuers: Tencent (Q
Coins), Sina (U Coins), NetEase (POPO Gold Coins), and Baidu (Baidu Coins)
- Online game-based virtual currency issuers: Blizzard Entertainment/The9
(World of Warcraft), Netease (Fantasy Westward Journey), Shanda (Woool, Legend
of Mir II), and others
- Virtual currency users: QQ users, online gamers, gold farmers, and virtual
currency traders
- Virtual currency exchange sites: Taobao, 5173.com, IGE, eBay China, and
others
- Virtual currency regulators: China Banking Regulatory Commission,
Ministries of Culture and Commerce, others
In-depth Analysis and Key Questions Answered
Below are some of the key questions answered in this report:
- How strong is user demand for virtual currencies in China?
- How will virtual currencies influence China' s economy?
- How well can virtual currencies compete with other online payment systems
in China?
- How will today' s virtual currencies in China fare in the long run?
- How will China' s government regulate virtual currencies?
- To what extent will virtual currencies become conduits for illegal
activities in China?
- What role will China' s virtual currencies play globally?
Table of Contents
1 Introduction
- 1.1 Report scope
- 1.2 What are virtual currencies?
- 1.3 Why virtual currencies matter
2 Virtual Currencies and Their Issuers in China
- 2.1 How virtual currencies are created
- 2.2 Instant messaging and portal-based virtual currencies
- 2.2.1 Tencent' s QQ phenomenon: avatars, Q Coins, and Q Pets
- 2.2.2 Sina U-Coins, NetEase POPO Coins, and Baidu Coins
- 2.3 Game-based virtual currencies
- 2.3.1 Online gaming currencies traded in China
- 2.3.2 Gold farming
3 Virtual Currency Trade in China
- 3.1 Real money trades
- 3.1.1 Q Coins and other portal-based virtual currencies
- 3.1.2 World of Warcraft Gold and other online gaming currencies
- 3.2 Virtual currency trading companies
- 3.2.1 Chinese trading companies: Taobao and 5173.com
- 3.2.2 International trading companies: IGE and eBay
- 3.3 Virtual currency exchange rates
- 3.4 Government regulation
- 3.4.1 Key regulating bodies
4 Virtual Currency Users in China
- 4.1 Purchasing and spending habits
- 4.2 Trading and selling habits
- 4.3 Production and creation habits
5 A Look Ahead: The Future of Virtual Currencies in China
- 5.1 How strong is user demand for virtual currencies in China?
- 5.2 How will virtual currencies influence China' s economy?
- 5.3 How well can virtual currencies compete with other online payment
systems?
- 5.4 How will today' s virtual currencies in China fare in the long run?
- 5.5 How will China' s government regulate virtual currencies?
- 5.6 To what extent will virtual currencies become conduits for illegal
activities in China?
- 5.7 What role will China' s virtual currencies play globally?
List of Figures
- Figure 1: Leading portal-based virtual currencies in China
- Figure 2: The evolution of Tencent' s virtual goods and services
- Figure 3: QQ games and services paid for by Q Coins
- Figure 4: Major online gaming currencies in China
- Figure 5: Top portal-based virtual currency exchange sites
- Figure 6: Top game-based virtual currency exchange sites
- Figure 7: Portal-based virtual currency market prices, March 2007 (RMB per
unit)
- Figure 8: Game-based virtual currency market prices, March 2007 (RMB per
unit)
- Figure 9: Portal-based virtual currency market prices and real currency
exchange rates, March 2007 (RMB per unit)
- Figure 10: Game-based virtual currency market prices and real currency
exchange rates, March 2007 (RMB per unit)
- Figure 11: China government bodies involved in virtual currency regulation
- Figure 12: Gold farming and real-world salary comparison
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