Niko Partners, the leading market intelligence firm on China's video game industry, has announced results from its latest report citing China's 46 million gamers spent $1.7 billion on online games in 2007, up 71% from 2006.

Advanced casual and casual online games made up 21% of the total, and new flash-based casual versions of popular MMO and RTS games demonstrated the hardcore gamers' appetite to play casual games along with subscription MMOs. Online revenue is expected to reach $2.5 billion in 2008 and $6 billion in 2012, for a 29% compound annual growth rate in the five-year period.

According to Niko's 6th Annual Review & Forecast Report, gamers are buying consoles with their disposable income as well. "In spite of the regulation that has banned the sale of game consoles in China since the year 2000, gamers are flocking to stores that sell illegally imported Wii, Xbox 360, PS3 and PS2 machines to take part in the excitement of console gaming," said Hanson.