Facebook goes fishing in China

Updated: 2013-10-17 09:22

By Yu Wei in San Francisco (China Daily USA)

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Social media giant Facebook — whose service has been inaccessible on the Chinese mainland since 2009 — recently held a conference entitled Game On in Chengdu, capital of Sichuan province, in an effort to attract local mobile game developers by offering distribution through mobile ads, according to Chengdu Commercial Daily.

A few months ago, Facebook launched a publishing platform for mobile game developers, calling it a "pilot program to help small- and medium-sized developers take their mobile games global".

Facebook"s second fiscal quarter revenue reached $1.81 billion, an increase of 53 percent over a year earlier. The stock jumped to above $30 per share, a price not reached since January.

Facebook"s strong performance is credited to its thriving presence in the mobile world. Its monthly active mobile users were up 51 percent to 819 million on a year-to-year basis. Mobile advertising revenue accounted for nearly 41 percent of Facebook"s $1.6 billion total advertising revenue in the second quarter.

China has overtaken the US to become the world's largest smartphone market. Meanwhile, games are by far the most popular type of application among Chinese users. According to a recent report from Asian market-analysis firm Niko Partners, China"s booming mobile games market is expected to generate more than $1.2 billion in 2013, up from $750 million in 2012.

"Chengdu has more than 400-500 mobile game companies, which is among the highest in China, including some world-class products," Chengdu Commercial Daily quoted a person who went to the Facebook Chengdu conference as saying. "Facebook chose Chengdu because of the city"s emerging mobile games market. The company hopes to collaborate with Chinese developers in order to boost its advertising revenue by also taking a cut of sales."

Facebook, the world's largest social network, claimed that it makes sure its partners" games are introduced to its more than 800 million monthly mobile users with promotional support.

"We are invested in the success of these games, and in exchange for a revenue share, we will be collaborating deeply with developers in our program by helping them attract high-quality, long-term players for their games," Facebook said on its website when it first launched its Mobile Games Publishing effort.

Lewis Ward, research manager of IDC's Gaming service, said that although usage is probably quite limited in China, Facebook no doubt sees China as a big opportunity for future growth, if and when the Chinese government relaxes its ban on such Web portals.

"I suspect that the Game On event in Chengdu was an attempt to better understand where Facebook's opportunities lie in China and to court as many local game developers as possible," said Ward. "If the ‘Great Firewall" against Facebook comes down in the next few years, Facebook will no doubt push aggressively into the game distribution business there, as it has in the US, Europe and beyond."

The competition in China"s domestic mobile game market will not be easy for Facebook in light of the country"s intensified gaming market. Tencent Holdings Ltd, China's largest Internet company, launched a mobile game platform earlier this year on WeChat, the popular app that has more than 400 million users in its domestic market.

But Ward said the analytics Facebook offers on the back end to developers is probably different from what Tencent offers their developer partners, although he no specifics.

"It may be that Chinese game developers will like the increased visibility into who"s using their games, and when and where. Lastly, Facebook"s ad platform appears to be distinct in several respects," he said.

"Ad targeting on iOS and Android could be better in some respects and the ad inventory may include some Western companies trying to build brand recognition in China, and so that may be a good revenue opportunity for developers and Facebook — again assuming the ban is lifted in 2014," he added.

Despite Facebook"s service being unavailable in China since 2009, Facebook has never given up on the market.

Facebook CEO Tim Cook and China Mobile Chairman Xi Guohua met Thursday and discussed cooperation, raising the possibility that the world's largest mobile carrier soon would begin offering the iPhone.

Some analysts believe Facebook's next move as it tries to obtain more revenue will be to enter China.

Contact the writer at Yuwei12@chinadailyusa.com