Game companies caps : the China vs US match

2005/01/21

Game companies caps : the China vs US match

Few people realize, but Chinese game companies are to be taken very seriously. The chart below compares leading entertainment software companies valuations in the US and China.

Set aside Electronic Arts, the industry mega-giant and what we have is a pretty even match between Activision and Shanda at 2.6-2.8Bn$, Take2 and Netease at 1.5-1.7 and THQ and The 9 at 0.8-0.5. Granted, there may well be a bubble in China right now.

But the Chinese companies have displayed higher than average profitability so far. Managed by US-educated PHDs and MBAs, they may soon be able to compete on other markets including the US, possibly through targeted acquisitions.