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Oct. 25 (NBD) -- Chinese game developer Giant Network Group (Giant Network, 002558.SZ) announced Tuesday that it will make a foray into the virtual idol market by introducing its first virtual anchor Menhera Chan soon.

Through cooperating with Menhera Chan's Japanese developer JOYNET, Giant Network becomes the sole agent for creating and distributing all products relating to Menhera Chan.

The anime character first appeared as popular stickers on a Japanese instant messaging app called LINE in 2017. After being introduced into the Chinese market the following year, it became an instant hit in the ACG (Anime, Comics and Games) circle. By far, it has gained over 50 million target users in China.

The game developer said it will invest hundred of millions of yuan in this project each year in order to fully tap the potential of virtual idol IP by creating contents and developing games and derivatives or through licensing.

According to the 2018 semi-annual financial report, Giant Network is stepping up efforts in developing new games and tapping more niche sectors of the gaming market, such as ACG-based one. NBD noticed in the report one of the company's reserve projects is an idle game called "sticker girl Menhera". That is to say, a virtual idol can be shaped as a game character in addition to serving as a performer.

Gaming has long been a major business in the online entertainment sector. But revenues arising from this segment saw a slight decrease this year due to tighter policy and fiercer competition in the industry. In order to create more growth drivers in this sector, the company is eyeing the wide ACG market in China.

According to a report released by iiMedia, the number of ACG uers in China is expected to grow to 276 million this year and 328 million in 2019. Most of them are young people who are willing to pay for ACG-based products. As young generations grow more financially independent, they will become more powerful spenders.

Currently, the most successful virtual idol is Hatsune Miku who has acted as spokesperson for over 100 brands and now it is valued at more than 1 billion yuan (144 million U.S. dollars). According to imcomplete statistics, Chinese VOCALOID Luo Tianyi also landed over 10 advertising projects in 2017. 

It can be seen that virtual idols have huge market potential in both the individual consumer front or business front. Headed by legendary entrepreneur Shi Yuzhu, will Giant Network be able to turn Menhera Chan into a success?

An industry insider said Giant Network has a track record in running games like Battle of Balls and ZhengTu Online, which might build a foundation for the company to offer an unique way to brand Menhera Chan.

However, being an agent of Menhera Chan doesn't guarantee success as there are many experienced market players in the sector. Also, content creation for virtual idols takes time. As the industry hasn't turned profitable yet, Giant Network has to feel its way ahead, the person added. 

Email: tanyuhan@nbd.com.cn