Every weekday the first thing Zhou Xian does when he gets home from work in Beijing is to start up his computer and begin playing the immensely popular online game World of Warcraft for the next four hours.

And on Saturdays and Sundays, he indulges his passion for even longer.

"On weekends I can stay at home playing the game for a whole day and never get tired of it," said the 30-year-old office worker at an IT company.

During poor economic times there are many like Zhou who would rather spend hours in front of their computer screens playing online video games than spend US$10 at a movie theater to watch a Hollywood blockbuster.

"It is a good way of relieving stress," said Zhou, who spends US$9 a month out of his US$900 monthly salary buying the game cards. "It brings a sense of accomplishment when you battle your way by slaying monsters with other players. And it doesn't cost me much."

The online gaming industry is an example of the lipstick effect, when people spurn expensive luxury goods in favor of cheaper and smaller "feel-good" items in times of financial hardship.

Despite the economic downturn, China's online gaming industry has seen an increase in sales as more people seek easier and cheaper means of entertainment as an escape from the stress of daily work.

Last year, China's online gaming industry turned over US$2.69 billion, a rise of 76.6 percent year-on-year. The revenue is far more than that of the combined revenues generated by films, television and audio-visual products, according to the Government's General Administration of Press and Publication.

Leading gaming operators in China such as Shanda, The9 and Giant all passed the US$200 million revenue mark in 2008 and remain optimistic for 2009. They say the credit crunch has had little impact on their businesses.

The online gaming industry also brought direct business income of US$7.03 billion to the telecommunication and IT industries, which have suffered from a sharp drop in advertising revenues.

With immense business opportunities in the market, Chinese online gaming operators are vying with one another for a slice of the lucrative pie. Last month, NetEase won a three-year license to run Activision Blizzard Inc's blockbuster video game World of Warcraft on the Chinese mainland. The deal was a major blow to the game's former Chinese operator, The9, because it had been the primary driver of the company's revenues.

Analysts estimated that the new deal would generate revenues of more than US$140 million annually in China from which Blizzard could receive a royalty of 55 percent.