KongZhong Monetizes Mobile Gaming Despite Piracy in Emerging Markets, Finds Pyramid

CAMBRIDGE, Massachusetts -

Some 90 to 95 percent of video games in emerging markets are said to be pirated, but one company doing something about it — Chinese mobile content provider KongZhong, according to recent analysis from Pyramid Research (www.pyr.com), the telecom research arm of the Light Reading Communications Network (www.lightreading.com).

Console manufacturers and game developers have unsurprisingly avoided countries with a lot of piracy — and not only because disposable incomes there tend to be much lower, writes Jan ten Sythoff, analyst at Pyramid Research in “Mobile Gaming: A Pirate-Free Future? (www.pyramidresearch.com/points/item/090813.htm?sc=PR081809_PPMOBGAM)” “However, mobile handset penetration levels in these countries are increasing, the capabilities of mobile devices are becoming more sophisticated, and networks are gradually enabling higher data speeds. These trends are opening a big opportunity for gaming on mobile devices. Games based on virtual worlds with in-game transactions, for instance, are gaining traction, as seen by the strong performance of KongZhong.”

- Read the full Pyramid Point “Mobile Gaming: A Pirate-Free Future? (www.pyramidresearch.com/points/item/090813.htm?sc=PR081809_PPMOBGAM)”

- Watch the Pyramid Preview, video highlights from Pyramid’s latest research report Mobile Gaming in Emerging Markets: Five Year Forecast and Impact Analysis (www.pyramidresearch.com/PyramidPreview090813.htm?sc=PR081809_PPMOBGA)

As analyzed in Pyramid’s recent report and the latest round of quarterly mobile data forecasts, mobile gaming is enjoying solid growth, from about 55 million gamers in 2005 to about 183 million in 2008. The global mobile gaming market is evolving fast on account of mobile adoption, and is expected to grow at a 16.6 percent CAGR during 2009 to 2014, reaching US$18 billion in 2014. This growth will be the result of continued strength in emerging markets and increased usage in developed markets. A wider range of business models are gaining traction to exploit this opportunity while addressing issues such as piracy and affordability.

Mobile Gaming in Emerging Markets: Five Year Forecast and Impact Analysis is part of Pyramid’s research report series. A blend of primary research and qualitative analysis, Pyramid’s research reports offer comprehensive coverage of the fixed and mobile communications space and enable those in the communications industry to stay ahead of changing market dynamics. Purchase this report online (www.pyramidresearch.com/store/RPMOBILEGAMING0907.htm?sc=PR081809_PPMO BGAM) or through Amalia Vega at avega@pyr.com.

Written by Pyramid analysts, Pyramid Points are complimentary online notes that provide insight into market, business, and regulatory developments in the global telecom industry, based on key findings from Pyramid’s renowned forecast services. View all Pyramid Points here: www.pyr.com/points.htm?sc=PR081809_PPMOBGAM.

For more information about Pyramid Research’s products and services, please visit www.pyr.com or contact us at info@pyr.com.

About Pyramid Research

Pyramid Research (www.pyr.com) offers practical solutions to the complex demands our clients face in the telecommunications, media and technology industries. Our analysis is uniquely positioned at the intersection of emerging markets, emerging technologies and emerging business models, powered by the bottom-up methodology of our market forecasts for over 100 countries-a distinction that has remained unmatched for more than 25 years. As the telecom research arm of the Light Reading Communications Network, Pyramid Research works with Heavy Reading, providing the communications industry’s most comprehensive market data, trusted research and insightful technology analysis.

About Light Reading

Founded in 2000, Light Reading (www.lightreading.com) is the leading online media, research, and focused event company serving the US$3 trillion worldwide communications market. Lightreading.com is the ultimate source for technology and financial analysis of the communications industry, leading the media sector in terms of traffic, content, and reputation. Light Reading’s research arms, Heavy Reading and Pyramid Research, provide the most comprehensive communications research, market data, and technology analysis in close to 100 markets around the world. Light Reading produces nearly 20 targeted communications events including TelcoTV, Ethernet Expo New York and Ethernet Expo London, The Tower Summit @ CTIA, and Optical Expo, as well as focused one-day events tailored for cable, mobile, and wireline executives. Light Reading was acquired by United Business Media in August 2005 and operates as a unit of TechWeb.

About TechWeb

TechWeb (techweb.com/aboutus), the global leader in business technology media, is an innovative business focused on serving the needs of technology decision-makers and marketers worldwide. TechWeb produces the most respected and consumed media brands in the business technology market. Today, more than 13.3 million* business technology professionals actively engage in our communities created around our global face-to-face events, Interop, Web 2.0, Black Hat, and VoiceCon; online resources such as the TechWeb Network, Light Reading, Intelligent Enterprise, InformationWeek.com, bMighty.com, and The Financial Technology Network; and the market leading, award-winning InformationWeek, TechNet Magazine, MSDN Magazine, and Wall Street & Technology magazines. TechWeb also provides end-to-end services including next-generation performance marketing, integrated media, research, and analyst services. TechWeb is a division of United Business Media, a global provider of news distribution and specialist information services with a market capitalization of more than US$2.5 billion.

*13.3 million business decision-makers: based on number of monthly connections

About United Business Media Limited

UBM (UBM.L) focuses on two principal activities: worldwide information distribution, targeting and monitoring; and, the development and monetization of B2B communities and markets. UBM’s businesses inform markets and serve professional commercial communities - from doctors to game developers, from journalists to jewelry traders, from farmers to pharmacists - with integrated events, online, print and business information products. Our 6,500 staff in more than 30 countries are organized into specialist teams that serve these communities, bringing buyers and sellers together, helping them to do business and their markets to work effectively and efficiently. For more information, go to www.unitedbusinessmedia.com.

Press contact: Jennifer Baker +1-617-871-1910 jbaker@pyr.com

Source: Pyramid Research

Jennifer Baker, +1-617-871-1910, jbaker at pyr.com