Will China produce the next GTA?

Is it only a matter of time before the next big gaming hit in the west is built in the east?

China's middle class with expendable income is increasing and so is the country's ambitions to become a world class gaming and animation development hub. Is it only a matter of time before the next big gaming hit in the west is built in the east?

This week representatives from powerhouse studios such as Pixar and DreamWorks, LucasArts, and Virgin are in Suzhou, China to attend the inaugural X Media Lab conference to meet and share ideas with their Chinese counterparts.

The event -- set up as a way for both western and eastern studios to learn and create new business opportunities -- is one of the first of its kind in China. The aim for both hemispheres is to tap into the billion dollar industry of film and gaming entertainment. Successes like the recent GTA IV release, which made more than US$500 million in just it's first week of sales.

Brendan Harkin, Founder and Director, X Media Lab, says the event aims to create a framework of communication for the future and set the stage for creating world class, cross cultural, and cross platform media solutions.

Paul Steed, a software developer who cut his teeth working in the US on such games such as the Quake series, Wing Commander, and Return to Castle Wolfenstein is one of the pioneers at the conference who is passing on his experiences of tapping into China. Forming his own company, Exigent Studios, Steed has set up studios in Shanghai and India where he's looking to build games for the global market.

Steed believes the next big game such as World of Warcraft could come from the east but believes games being developed for a global audience need to be localised for different audiences around the world.

To achieve this Steed says it's more than just changing the text and language in a game. It's about body language of the characters, colours used in the game, and understanding the cultural differences for each intended market.

Back in 2003 Sony Entertainment learnt this the hard way by trying to import the popular US game "EverQuest" to China by just changing the text to Mandarin.

"What we learned is you can't just translate Western games and dump them into China," said John Needham, chief financial officer of Sony Online Entertainment in 2003. "You've got to get local to have big success."

After talking to delegates and vendors at the event, it's clear China, and in particular, Suzhou, are looking to create big budget and first class gaming titles for the Chinese and international market.

Studios such as Suzhou Snail and Hanwen Animation are already gaining significant venture capital to help create the next massive gaming titles for China and abroad. To help boost investment significant tax breaks for certified gaming and animation shops are being offered.

As with other software development initiatives going on in China the gaming industry will be one to watch. While I don't think we'll see some of the adult themes of games like Grand Theft Auto anytime soon, the everyday mayhem of driving in cities like Shanghai is more a reality than gaming escapism. The wheels are certainly in motion.