The government may unveil a strategy to encourage the development of the online games industry in July, an official at the Ministry of Culture said yesterday.

Zhang Xinjian, deputy director general of the department of the culture market under the ministry, said his department and the Ministry of Information Industry are working on a policy to regulate and develop the online games business.

The combined sales of online games companies reached US$298 million in 2004 - 48 percent growth over the previous year. The gaming population was 26.33 million, almost a quarter of the number of Internet users.

"There are some problems in the online game industry, but we must solve them through development," said Zhang at the China Online Game Healthy and Sustainable Development Forum in Beijing.

The policy will encourage and support game developers and operators as they design products based on traditional Chinese culture and patriotism.

Zhang said a cross-ministry co-ordination group led by the Ministry of Finance is also working on financial incentives for these sorts of online games companies, including research and development funding and tax breaks.

The government hopes domestic games will dominate the Chinese market and build enough strength to compete internationally in three to five years.

Zhang said China will establish four cartoon and online games bases in Shanghai, Guangzhou, Chengdu of Southwest China's Sichuan Province and Dalian in Northeast China to develop the industry and train talent.

The Shanghai hub began operations last July, but the other centers are still in the pipeline.

A campaign to strike against illegal online games operations such as those without proper licences, those promoting violent or pornographic content, and piracy servers, was launched in April and will run until August.

Zhang said eight illegal websites were shut down and four game operators had their businesses suspended.

Ken Li, marketing director of the gaming operation at NetEase.com Inc, said his company is looking forward to further government backing.

"This industry is in need of many pushes, but government support is the most important factor," said Li.

He said a tighter crackdown on piracy servers, an improved regulatory system and the training of professionals are what game developers and operators need most.

Zhang revealed the Ministry of Culture and the Ministry of Information Industry are also drafting a compulsory technical standard for online games, which will be released in the near future.

The standard will require online games operators and developers to put in place technical measures to prevent players, especially young gamers, from staying glued to their computers for long periods.

(China Daily June 30, 2005)