Subject category:
Strategy and General Management
Published by:
IBS Research Center
Length: 14 pages
Data source: Generalised experience
Topics:
Shanda Interactive; On-line game; Internet infrastructure; Interactive game; Internet service provider; Role-playing game; Game software; Virtual community; Business model; Research and development; Short messaging service; Market capitalisation; Literature portal; On-line entertainment market; Beta testing
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Abstract
Shanda Interactive Entertainment Limited was one of the fastest growing Chinese on-line gaming companies. The on-line games industry had come of age in China by 2004, with a market size of US$297.9 million and Shanda controlled a 35% market share. Mushrooming of on-line gaming companies led to stiff competition, with each company vying with each other to capture the market. Shanda?s ?The Legend of Mir II? was one of the ?Massively Multi-player On-line Role-Playing Games? in China. In order to expand the size of the company and to enrich technological infrastructure as well as the on-line game contents, Shanda undertook a lot of mergers and acquisitions since its inception. By the end of 2004, the Chief Executive Officer of Shanda, Mr Chen Tianqiao, intended to expand it as a global entertainment company and not restrict it to on-line gaming only. However, Shanda was facing increasing competition from rivals like The On-line and Kingsoft Company. Besides, the company was adversely affected by technical problems such as hacking of its servers through cheat programmes and legal problems related to copyrights. This case deals with: (1) the competitive landscape of the Chinese on-line game industry; (2) the strategies adopted by Shanda to become a market leader; (3) the challenges it might face to retain its leadership position; and (4) the strategies adopted by Shanda to meet the challenges of the competitive market.
About
Abstract
Shanda Interactive Entertainment Limited was one of the fastest growing Chinese on-line gaming companies. The on-line games industry had come of age in China by 2004, with a market size of US$297.9 million and Shanda controlled a 35% market share. Mushrooming of on-line gaming companies led to stiff competition, with each company vying with each other to capture the market. Shanda?s ?The Legend of Mir II? was one of the ?Massively Multi-player On-line Role-Playing Games? in China. In order to expand the size of the company and to enrich technological infrastructure as well as the on-line game contents, Shanda undertook a lot of mergers and acquisitions since its inception. By the end of 2004, the Chief Executive Officer of Shanda, Mr Chen Tianqiao, intended to expand it as a global entertainment company and not restrict it to on-line gaming only. However, Shanda was facing increasing competition from rivals like The On-line and Kingsoft Company. Besides, the company was adversely affected by technical problems such as hacking of its servers through cheat programmes and legal problems related to copyrights. This case deals with: (1) the competitive landscape of the Chinese on-line game industry; (2) the strategies adopted by Shanda to become a market leader; (3) the challenges it might face to retain its leadership position; and (4) the strategies adopted by Shanda to meet the challenges of the competitive market.