Kongzhong, one of China’s leading mobile gaming content providers, is starting to perform: several analysts have begun labeling it with ‘outperform’ markers, it has won a slew of awards both internationally and within China as a top performing startup and best mobile gaming company, and revenues are on the rise.

I have watched this company for the past year or so. With online gaming soaring in China at3.7 bln RMB (approx. US$450 mln), and mobile subscribers now at over 390 mln, China is the perfect market for mobile gaming to take off. Of course, the mobile gaming industry faces more challenges such as platform compatibility, ease of loading games onto phones, relative inexistence of networked games, etc. However, the industry is making progress, as seen by folks like Kongzhong who are growing the space. China’s buildout of faster, 2.75G and 3G networks will help address bandwidth issues for creating persistent networked, mobile games. Rumors have it 3G licenses will be awarded during the summer of this year.

With all this momentum, it looks like Kongzhong is poised for record growth over the next year.

The gaming industry in China is really quite amazing. Over the last year, the online gaming industry doubled. If you walk into any internet cafe in Beijing, chances are it will be packed with kids playing games. It doesn’t take a genius to see them migrate to mobile gaming when the content/delivery side matures. It will be interesting to see once someone develops a good mobile, networked game and the network effect kicks in, just like it did for online PC gaming.