Representatives from the games industry taking part in a conference in London this week heard that more than 20 million Chinese were playing games and the number was rising fast.

China is set for a big explosion in spending on entertainment, largely fuelled by online sales of video games, a report this week predicted.

Last year, Chinese players spent almost US$500m on online games.

The amount of money being spent on games has led to a sea change in the attitude of officials, who used to see games as similar to gambling and laziness.

"The government is encouraging and supporting the development of online games," said Sunray Zhaohui Liu, President of the Beijing-based New Synergy Consulting firm.

Console makers such as Microsoft, Sony and Nintendo rely on game sales for much of their money.

World of Warcraft has proved a big hit with Chinese gamers
But widespread counterfeiting means pirated games are easily available for a fraction of the price of the retail copy.

It is another reason why online gaming has proved such a money-spinner as gamers pay to play.

Mr Zhaohui Liu highlighted the success of the Massively Multiplayer Online Role Playing Game, World of Warcraft.

The game was launched in China at the beginning of June, with gamers paying five cents an hour to play.

The title was phenomenally successful, with the most number of Chinese playing at once reaching 450,000.

"With the fast growth of the Chinese market, the number of World of Warcraft paid subscribers worldwide broke through two million this month," said Mr Zhaohui Liu.