Understanding the Chinese Game Industry (Part 1)
Where do you go if you want to have fun? The Chinese mobile game market. As of 2016, the Chinese game industry was the largest game market in the world. China’s increasing accessibility to internet, breakneck pace of technology evolution, and booming population consuming digital media have all paved the way for the development of China’s game industry. Many gaming companies have already made a move to establish a presence in this market. Whether you’re looking to develop a game or are trying to localize an existing game into the Chinese market, the next two posts will help you understand the market (Part 1) and the challenges and best practices for localization (Part 2).
Landscape of the Market
Just how big is the Chinese game industry? Now that about half the population of China has internet — that’s about 731 million people — some have estimated that there are around 600 million gamers in China. That’s a market share of 24.6 billion, according to Bloomberg Technology, nearly a quarter of all gaming revenue worldwide. And the market keeps growing: the industry is expected to be worth 26 billion in 2017.
PC games, browser games, and mobile games are the top three games in terms of domestic market share. For the first time last year, mobile games‘ revenue surpassed PC games to become the most profitable. There are some good reasons for that: although it’s easier to generate stickiness (the depth of user engagement) for online PC games, it’s more expensive and time-consuming to develop a PC game than a browser or mobile game. It takes about a year to get a PC game ready for launch, while on the other hand, mobile games take about half a year to develop. Mobile games are often designed with a short lifespan in mind, however: an average mobile game lives on the market for about a year, and a good mobile game can stay trending for up to 2 years or more. PC games, given their higher quality and development costs, stick around longer, but take longer to earn money.
The Mobile Game Industry
Right now, the mobile industry is incredibly competitive and dominated by two internet giants: Tencent and NetEase. Both companies are pressuring small — and medium — sized gaming companies to merge for survival. It seems to be working: according to Newzoo, Tencent is the top-earning gaming company in the world, with a 17% increase from the previous year. NetEase was the 7th highest-earning, with a 50% increase from 2015.
Game Development Trends
Currently, there are a high number of games in the Chinese market, but a lot of them are of lower quality. Many mobile developers’ mindset is to publish games quickly to seize more market share, rather than handcraft a masterpiece. The biggest difference between Chinese and Western games is their focus on monetization: while Western developers rely on providing new content updates to keep users, monetization is how Chinese mobile game developers retain users. For example, to maximize customer retention (stickiness), Chinese games heavily use events and promotions. Quite often you will see pop-up windows and message boards informing customers about discounted items and events.
Understanding this difference can help make your localization efforts more profitable. When localizing games into the Chinese market, on-point localization for offers, promotions, event messages, and campaigns with a quick turn-around time can greatly boost games’ monetization efforts. But when introducing Chinese games to the West, monetization needs to be toned down a bit in order not to undermine Western gamers’ experience.
Interested in learning more? See our next post with some strategies for localizing your game into Chinese markets or for bringing a Chinese game into Western markets.
See also our posts: Social Media in China and Simplified or Traditional Chinese, Mandarin or Cantonese?