What you need to know about China's mobile gaming market
A few key talks at this year’s Mobile Game Asia event in Singapore shed light on China’s gaming industry and its next targetBy Jonathan Toyad 25 Jul, 2014
Last week’s Mobile Game Asia conference was an eye-opener for many developers and publishers wanting to tap into the China market. And its keynote speech was very apparent in hitting this point home: China is still a potential mobile gaming goldmine, and Southeast Asia is slowly morphing into the next treasure trove.
Two representatives from China — Brian Jiang, Deputy GM, 360 Mobile Game Division and Qiu Yuekun, CEO, iAppPay — talked about the mobile gaming space in the country and their intent to expand. Here is what e27 took away from a part of the Mobile Game Asia conference.
China is still healthy for mobile gaming business
According to Jiang and his company’s studies, the Chinese mobile gaming market has reached US$1.6 billion, with the market expected to double in 2014. “From last year to this year, there’s a lot of development in the market. Acquisition for local content is pretty huge; new users are on a high rise,” he added.
The demographic for mobile games in China is between the ages of 17 and 35; this is similar to the age group of console gamers in the US and Europe. 70 per cent of the game revenue comes from this age group that is willing to spend on free-to-play games. 65 per cent of mobile subscribers are under age 35. So long as your games are well-designed following its freemium model and have enough of attractive aesthetics to capture the attention of today’s short-attention span audience, you’re good to go.
Capitalising on missing services = profit
While the rest of the world can use Google and its Google Play online app store, China does not get that luxury as the service is banned. Enter 360, a security company that utilises the security of mobile phones, PCs and tablets. Its key app in the company is the 360 Mobile Assistant, and it fills up that Android app store void in the country.
Thanks to the monopolistic opportunity, the app has seen 400 million active users and has been downloaded 32 billion times. It currently occupies 40 per cent of the total market in China. This is all a matter of creating an app at the right place and the right time, especially when a big player from another country is barred from entering.
Scratching each other’s back
Games, be it from Asia or America, is the key reason companies like 360 exist. Content has to be there so that a third-party platform localises and distributes games in the right channels for more users to see and play them. Conversely, a local distribution channel like 360 is the only way an overseas game can even make a dent in the esoteric market.
360 has helped out Gameloft publish the endless runner Despicable Me: Minion Rush, which has achieved over 10 million RMB in its launch last year. EA’s strategy game Plants vs. Zombies 2 was downloaded 10 million times within 36 hours with the help of 360.
This shows that Western and Southeast Asian publishers and game developers who wish to make it big in China need to utilise whatever Chinese partnerships they can get.
Southeast Asia is China’s next target
Although China is a huge market with 1.3 billion people, there is a lot of saturation going on in terms of game genres and copies. Hence, game companies in China are slowly expanding to Southeast Asia.
This is due to the geographical location and certain cultural similarities. Southeast Asian countries like Indonesia and Malaysia have their own Chinese communities. According to Yuekun, the region’s current development level is similar to what China used to be back in 2011.
He elaborated further that 2011 was the year China started picking up on playing games on mobile devices, leading up to 2014 penetration numbers like the US$1.6 billion mentioned at the beginning of this article. “(This situation) is what’s happening now in Southeast Asia, with more traditional gamers switching to smartphone gaming as the months go by.” Backing that up, Jiang said that Southeast Asia’s mobile gaming revenue will reach around US$600 million and will have global traction in the next few years.
Language, to a great extent, is the elephant in the room. Localisation between a multitude of Southeast Asian languages like Malay and Thai will be an arduous task for companies like iAppPay to handle. Time will tell if the localisation teams from China will start outsourcing help from the region, either as silos or as a group effort.
Also Read: Is Guangzhou China’s next startup hub?
Indonesia leads, Malaysia speeds
According to iAppPay’s statistics, the top five countries in the mobile gaming space are Malaysia, Thailand, Indonesia, Vietnam and the Philippines. Indonesia is still the largest region with 281.9 million mobile subscribers and 52 million mobile social users.
The fastest-growing market? Why it’s Malaysia, as its heavy game revenue growth went up by 121 per cent in a year in terms of transaction volume. So there’s a chance a popular Chinese action collectible card game like Dota Legend will make its way in a Southeast Asian native language.
Bank card > credit cards
A few people do pay for their games and entertainment using credit card via Steam and other digital distribution platforms, but did you know that a lot more people use debit instead?
According to Yuekun, gamers in China use local bank cards (ATM cards, debit) for microtransactions in games. 72 per cent of mobile gamers in the country use bank cards more than other forms of card payment like credit cards and point cards (like MOL’s payment system). And with a lot of content makers in China specialising in mass multiplayer online games and digital collectible card games, more and more people will start using debit cards to get more out of their buck.
Singapore, Thailand and Malaysia are the top three countries with a huge bank card penetration; credit cards aren’t widely used in Southeast Asian countries as a whole. Therefore, services like iAppPay are beneficial in providing alternate payment solutions for gaming companies in specific Southeast Asian countries. Perhaps Chinese game publishers should start making friends with several bank companies like CIMB and Bank Indonesia to expand microtransaction options.
Despite Southeast Asia being a new market for China to tap in, the country is on its way to expand there. Essentially, the country is taking a page from Japan companies like gumi: releasing a local game in a region that has almost similar taste in games, aesthetics and payment models in hopes of achieving the same level of revenue success. In any case, it’s a bold new frontier for China and Southeast Asia alike.