In a new report on China's online gaming market, IDC says it expects mainland China's online gaming market to show steady growth over the next five years with a relatively high compound annual growth rate of 34.7%.

The "China Gaming Market Analysis and Forecast 2004-2009" report, jointly released by IDC China and China Game Publishers' Association, a subordinate to China's General Administration of Press and Publication, estimates that the telecom revenue directly generated by online gaming in China in 2004 amounted to US$1817.9 million.

"Rapid Internet development has fueled the growth of online gaming, which has impacted various sectors like telecom, Internet, computer, software, and consumer electronics," says Grace Zheng, Senior Analyst, Cross-Product Research Group, IDC China.

However even as many mobile companies are shutting down because of poor wireless offerings and government sanctions, the report points to high future growth in the mobile gaming sector.