Mobile gaming booms in China

CNC report from Beijing
Added On March 25, 2013

China's smartphone market overtook the U.S. last year to become the largest in the world.

Apple products continued to prove popular, while sales of affordable Android handsets exploded.

The trend has in turn driven the expansion of the mobile games industry in China.

Fantasy, sci-fi, puzzles, racing: there are hundreds of gaming apps to choose from.

International games studios are keen to get a slice of the booming Chinese market.

But Chinese developers are also looking West -- seeing opportunities to export their best-sellers to players overseas.


Glued to the small screen…

Research has found Chinese gamers spend an average of 8 hours per week playing video games, more than in any other country.

Games consoles have been banned in China for the last decade.

Whereas gamers used to get their fix playing web games on PCs, many now carry their favourite titles around in their pockets.

"Mobile gaming is more convenient. When I am on subways, buses, or taking a long-distance trip, I just play mobile games to kill time. "
"Mobile phones are small and easy to take along wherever you go."

"Playing games is something you can do lying in bed. "

Mobile gaming is BOOMING in China, spurred on by the extraordinary popularity of smartphones.

Last year the country became the world’s largest smartphone market, with over 200 million iOS and Android devices.

The sector was worth 1.7 billion RMB, or around 270 million U.S. Dollars in 2011, jumping about 90 percent to 3.2 billion RMB, or just over 500 million U.S. Dollars in 2012. This year, it's expected to be worth 7.8 billion RMB or 1.2 billion U.S.dollars.

One of China’s leading developers in the field, Hiyou, co-launched the China Mobile Gaming Enterprise Summit two years ago.

The event brings developers, publishers and promoters together in Beijing to discuss the present, and future, of a fast-moving industry.

"2013’s definitely going to be a boom year for mobile games. Last year only 3 or 4 mobile games reached a monthly revenue of 10 million yuan. However, by February of this year, one had already exceeded 30 million yuan. Hopefully many mobile games will exceed 50 million RMB in 2013. And China’s mobile games market is expected to at least double compared to last year.

But the sharp rise in the popularity of mobile games is taking players away from their desktop computers.

U.S.-based analysts Nico Partners predicted last autumn that the number of people playing mobile games in China would soon exceed the number who play on PC.

China's become known as the land of opportunity for the developers of mobile games, both domestically and internationally.

HappyLatte, a development studio based in the chic expat district of Sanlitun, has taken the global mobile game charts by storm with its Wild West gun duel, High Noon.

The game pits players against each other in a real-time quickdraw, turning an iPhone into a deadly weapon.

Since its release in 2010, the English-language app’s been downloaded some 12 million times.

But now its developers have put out a version in Chinese.

Publishing Director Jethro Cramp says after monitoring the market here, HappyLatte decided the opportunity was too big to miss.

SOUNDIBTE (ENGLISH) JETHRO CRAMP, Publishing Director, HappyLatte:
"I can’t say this game is going to do well in China – that would be looking into a crystal ball. But according to App Annie’s figures on market growth, if you look at China, I think last summer it probably wasn’t even one of the top ten grossing countries in the world. In October, it entered at number eight. In December, it hit number six. I don’t have figures yet for January but I’m expecting it to very soon be in the top five.

So far, this version is a straight translation but the team knows it may need to adapt certain features to better meet the demands of the Chinese market.

When it comes to making money, though, High Noon is ahead of the curve.

In the West, most content is designed for a paid download model – meaning a player will pay for a game upfront, before trying it out – but in China, the freemium model dominates.

The download itself is free, but once players get hooked, they can pay to unlock premium features, like power-ups for their characters.

The revenue potential of free download games can actually outstrip paid ones.

SOUNDIBTE (ENGLISH) JETHRO CRAMP, Publishing Director, HappyLatte:
"High Noon has always had a freemium model, in fact it was probably decided upon six or seven years ago. We were watching the development of games in Asia and the freemium model was very, very strong. We believed firmly that this was going to take over the West. At the time, western games companies couldn’t see it, and if you look at it now, freemium dominates the world."

But guaranteeing a Western game takes off in China goes far beyond monetization.

Henry Fong is the co-founder of Yodo1, a publishing platform that helps overseas games developers break into the Chinese market.

The platform’s worked with big Western names such as Robot Entertainment in the U.S. and German studio HandyGames.

Yodo1’s in-house designers are experts in cultural adaptation.

"The first thing you need to know is who your gaming audience is. Chinese games are coporated with different stories, different themes, different folklords. So make sure that when you are designing a game, we designed it for a global audience and you are really making assumptions on that a chinese person or a chinese gamer might have been grown up with. //
Storyline is extremely important. The artwork, just reaving certain elements of different culture styles into a game can have a huge impact on the distribution of monetazation capability for your game and also understanding what the game they want to play and also how they want to pay for game contents is also an important aspect of doing well in the China market."

(DEMO: Alpha Zero)
This sci-fi shoot-em-up game, Alpha Zero, has been localized with the introduction of Chinese spaceship commanders…Yodo1’s designers have access to the game’s source code so they can rewrite the gameplay from scratch.

Another service Yodo1 offers is intellectual property protection, a key concern of foreign developers..

Its team polices major app stores in China for partners' pirated material, then works with the stores to offer legitimate, localized versions instead.

If a foreign developer's path into China is full of landmines, the reverse is also true.

Chinese games studios are increasingly looking to sell their titles abroad.

Beijing-based Hoolai Games has already found success in the West.

Hoolai Three Kingdoms made it to the top spot in the Chinese app store when it was released in 2010.

It's since garnered a million users overseas.

"If you do a game in a Chinese background like Three Kingdoms or like Wuxia background, you need to completely change the game design to fit U.S. Market. The market big but in China, competition is also intense. There are hundreds of even thousands of developers. They try to make a big hit game. And also, in overseas market, the ecosystem is better compared with Chinese market. Because in China, channel is pretty strong, they get a significant percentage of total game revenue, but in overseas market, the channel is not as strong as in domestic market.

Mr Wang says that 2013 will be the year of Android games.

The operating system is already dominant in China, with over 140 million handsets sold compared with more than 60 million iOS devices.

"There are many types of Android smartphones from 5000 RMB to 500 RMB. They occupied 80 percent of the smartphone market. If you go to games, you will get the same ratio. The Android game market will be 3 or even 4 times larger iOS in the future."

The supremacy of Android could be boosted by the next advance in mobile games development. Yodo1’s Henry Fong predicts we’ll soon play our smartphone and tablet games on our TV sets…

"One thing that is especially interesting is that Android is making its way up into big screen TV. So new companies like Wuya in the western market and also many of the traditional mobile manufacturers are now doing deals with TV manufactures to basically move the Android platform up to the big screen. So when you say console gaming, the liner actually start to blur between mobile gaming and console gaming. So Android games designed for the mobile phones today are very likely to be optimized onto the big screen over the next 12 months? "

One thing’s certain, wherever mobile gaming goes next, China will remain a major global player.