Over the past decade, China's gaming market has exploded. Recognizing that games could be a powerful cultural tool to teach its citizens about history and culture, the gaming market grew from less than $160 million in 2003 to a $9 billion market in 2012. Of course, the biggest benefactors have been domestic gaming giants, but there are some who have profited more than others. 

Two companies that seem on an unstoppable path of profits are Giant Interactive (UNKNOWN:UNKNOWN) and NetEase (NASDAQ:NTES)Meanwhile, Shanda Games (UNKNOWN:GAME.DL) and Perfect World (UNKNOWN:PWRD.DL) haven't done as well.

In the video below, Fool contributor Kevin Chen outlines how you should think about China's gaming market. Through learning about these companies' successes and failures, you'll get a better understanding for why licensing agreements won't work -- even if it is with Activision Blizzard (NASDAQ: ATVI) -- and how you can profit from the Chinese government's policies. To learn more, watch the video below.

Fool contributor Kevin Chen has no position in any stocks mentioned. You can follow him on Twitter at @TMFKang or on Google+The Motley Fool recommends Activision Blizzard, Giant Interactive Group, and NetEase.com. The Motley Fool owns shares of Activision Blizzard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.