American game developers look to China

Updated: 2013-03-29 11:37

By Yu Wei in San Francisco (China Daily)

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American game developers look to China

Shen Zhou (second right), deputy general manager of China Unicom WoStore's operation center, awards the finalists at the Game Developers Competition in Silicon Valley. Yu Wei / China Daily

International games and apps developers are eyeing China, hoping to get a piece of the pie from the second largest games and apps market in the world.

This week China Unicom WoStore, the only official app store of China Unicom, one of the three largest telecom operators in China and the Great Wall Club, a network-based CEO club in the global mobile Internet industry, hosted a game developers competition called "Apps and Games Go to China" in Silicon Valley (Santa Clara,CA).

GuitarBots, a Finnish interactive online tutoring game that aims to make learning guitar easy and fun, was the winner, narrowed down from seven international finalists chosen from a pool of applicants to demo their app at the competition.

Christoph Thr, CEO of the Finnish startup Ovelin that created Guitarbots, said the company is very focused on the Chinese market.

"China is an extremely interesting and important market for our game developing since learning musical instruments is popular in China," Thr said.

As the winner, GuitarBots will get the chance to demo and meet with sponsors and mobile industry experts at the Global Mobile Internet Conference, which will be held in both Beijing and Silicon Valley this year and is considered the largest and most influential annual industry conference in Asia.

The Chinese games industry grew 35.1 percent year-on-year to reach total estimated revenues of $9.7 billion, according to the China Game Industry Report 2012.

While mobile gaming is still in its initial stages in China, sales revenues of the China mobile game market in 2012 amounted to $520 million, with a year-on-year growth rate of 90.6 percent. The user base for mobile games is 89 million, with a year-on-year growth rate of 73.7 percent.

According to Tencent Games, 64.9 percent of Chinese mobile game users are younger than 24 years old and 18.9 percent are between 25 and 30 years old. Education levels of players range, with 63.6 percent possessing only a high school degree or less. This is likely due to the high percentage of users who are still teenagers.

The top three China mobile games are Fishing Joy 2, Da Zhang Men and QQ Royal, with $4.79 million, $3.99 million and $3.20 million monthly revenues respectively.

"Fancy games may not be a very easy model to monetize in the Chinese market," said Shen Zhou, deputy general manager of China Unicom WoStore operation center. He noted that Fishing Joy 2 has been consistently rated by users as boring and easy, yet continues to be successful. For the Chinese market, the simpler the better, he said.

"We see that there is huge growth in the number of mobile phone users, but the new users are what we call young or simple users who are not keen on [complicated] technologies," Shen said. "However, they are a major component of paying users."

"There are two keys to succeeding in China's game market: targeting the largest user base and creating the simplest game," he said.

Distribution in China's mobile market is different from other countries. Elsewhere, developers can upload their apps to an app store. However, that doesn't necessarily apply to China where there are hundreds of third-party app stores. The path to making money isn't always obvious, he said.

In a country where users are used to getting most digital content for free, gamers need to consider new strategies, said Henry Fong, the CEO of Yodo1, a service company that helps companies enter the Chinese iOS and Android app market for games. "Chinese game players have been trained so many years on the 'free to play' model," he said. "If you're going to offer games for paid download with no freedom to play, it is going to be a waste of time to go to China."

However, the design of a game will still have the biggest impact on monetization, he said.

While GuitarBots already has some users in China, it is only in the beginning stages of developing its reach in the country. The game is still only offered in English, but the company hopes to launch a Chinese version by December. Ovelin will also launch a piano tutoring game. "Our goal is to make [a game] for all the popular instruments," he said.

The company is also considering utilizing a different credit system, in which users will buy smaller amounts of playtime as an in-app purchase, he said.

"It's mostly our technology that is extremely difficult to copy," he said. "And because its algorithms improve with usage (the more users the better system we have), we believe that we can stay well ahead of the curve."

(China Daily 03/29/2013 page10)