More than 80 million of China's internet users will be playing online games by 2010, almost half of whom will be paying to play, China-based research firm Pacific Epoch predicts.

Estimates of the number of online gamers currently playing in China vary. According to US research company In-Stat there were more than 25 million by the end of last year.

Pacific Epoch puts the number considerably higher, at almost 37 million, based on data from the China Internet Network Information Center. Other estimates fall between these two figures. 

Target figures for future growth also vary; earlier this year In-Stat predicted that the number of gamers would exceed 61 million by 2010.

Past this date, there is plenty of room for more growth, although it is expected to be slower. Even the most optimistic government forecasts only show about one sixth of the country's population online by 2010.

In-Stat estimated that the number of broadband households in China will increase to 130 million by 2010 at an annual rate of 29.3 per cent.

"Considering the large population base in China, there will be more than two thirds of Chinese households without broadband access in 2010 which presents an enormous growth potential in internet access and advertising spending," Grace Tang, lead partner at PricewaterhouseCoopers' Entertainment & Media Practice, told the Shanghai Daily this week. 

One of the organisers of the China Digital Entertainment Expo and Conference told the Shanghai Daily yesterday that local companies have now increased their share of China's online games market to 60 per cent.

However, he noted that Chinese companies could lose that market share if they did not focus on innovation.

With only about half of gamers paying to play, Chinese games developers are experimenting with a variety of ways to generate revenue.

Earlier this week NetEase announced a deal to advertise sweetened bottled tea drinks in its game. "NetEase will brand certain virtual settings, items and characters in the game with MasterKong's bottled tea products," said a report in the China Daily.