As reported in Marbridge Daily and 17173.com, the Ministry of Culture announced its 2012 Report on the Chinese Internet Café Market on 4/28/13. There are now 136,000 I-cafés (Niko Partner’s estimate was 138,000), with 11.95 million PCs (Niko Partner’s estimate was 11.0-12.4 million). Revenue of I-cafés has fallen overall by 13.2% since 2011.
The three biggest areas of demand in I-cafés are online games, music, and search, and online video is rising fast as well. I-café usage will expand in Tiers 2 and 3 (Niko Partners would add tier 4 to that list), but overall usage will continue to decline as home PC and broadband penetration increases. 40% of I-cafés are now owned by chains, whereas more than 75% of I-cafés had been independently owned even just a few years ago. This channel remains very important for online games distribution.