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Abstract: Through a retrospective account of the evolution of China's online game industry, this paper examines the political, economic and cultural factors, with an emphasis on formal policy making, that have shaped the industry. Drawing on the theory of fragmented authoritarianism, this study finds that 10 Chinese online games are deeply shaped by the political environment of the autocratic Chinese system, which features inter-ministerial competition and intertwined state control and commercial interests. The current Chinese online market is combined with a strong private sector presence and a considerable government role. The Chinese government seems to have achieved its policy goal of helping Chinese companies to dominate the domestic market. However, the extensive and ambiguous government 15 policy and regulations, have, to some extent, restrains innovation. To that end, whether China can accomplish its three-stepped importation-substitution-creation strategy in this highly creative industry remains to be seen and warrants future investigation."

"In the space of several years, the Chinese games industry to reverse its market share with regards to Korean incumbents in China. We analyze the catch-up process that allowed this to happen by separately analyzing the core constituents of games (design, technology (code), content, and in a broader fashion, elements of the business model) as layered components."

Highlights two games, one designed an American and one designed by Chinese, one taking as its subject the end of American military hegemony, the other portraying American soldiers as "the enemy." Socio-political implications of these developments are discussed, particularly how these represent a break from mainstream video game content.