Research firm Analysys International expects China's online game revenues to hit 73.1 billion yuan ($10.7 billion) in three years.

The growth will be driven by an increase in internet penetration, which is currently around 27 per cent in China according to government data, reports Reuters. The figure in South Korea and Japan is around 70 per cent.

However industry revenues are expected to come in at around 26 billion yuan ($3.8 billion) for this year and then grow by an average of 41.2 per cent over the next three years. Analysys International says that by 2012, China's online game sector will have 230 million online gamers compared with 69 million currently.

Major players in the sector include Tencent Holdings, Shanda Games and NetEase.com.

China’s General Administration of Press and Publication (GAPP) recently terminated NetEase's application seeking approval to operate Blizzard’s World Of Warcraft.