Understand your customer to enter the Chinese mobile game market: Mobile Game Asia

The key takeaway for the morning session at the inaugural Mobile Game Asia in Singapore this July was that local knowhow is critical in penetrating the Chinese gaming market. 

A panel moderated by David Song, Founder and Secretary General, GMGC, with, from left, Shenghong Liu, CEO, Shengri Tech; Dalu Ye, COO, Sincetimes; Haiyu Ni, CEO, TalentWalker; Zhouying Dai, General Partner, CA Venture; and Song.

"The Chinese mobile game market is hyper-competitive,” warned Qiu Yuekun, CEO, iAppPay, who is also Halodigit’s Co-founder. “Although China is a huge market with 1.3 billion people, there is already an oversupply.”

Qiu estimated the Chinese mobile gaming market growth rate at 20%, with nearly two-thirds (65%) of mobile subscribers from just one age group. "Those aged 17 to 34 are the most active in the mobile game market,” he said.

Brian Jiang, Deputy GM, Qihoo 360 Mobile Game Division noted that overseas game developers from the US, Japan and Korea have all seen significant challenges entering China, particularly with localisation and logistics, including server setups and payment channels. “In the past two years, their revenues have not been great,” said Jiang. 

“If you cannot understand the local game culture and the unique characteristics of Chinese gamers, you will have a lot of problems,” stated Xin Wang, CEO, Dianru Advertising. 

Speakers shared some tips on designing a popular mobile game for China.

Go back to the fundamentals

Dalu Ye, COO, Sincetimes, which has more than 10 million gamers playing its games on a daily basis, said that it is still about fundamentals. “What’s foremost is the quality of the games," he said. “Word of mouth is a very good way of increasing popularity. Most players are downloading the games because their friends suggested they download them.” 

Haiyu Ni, CEO, TalentWalker, noted that players in different Chinese cities behave differently. “There are tier one and tier two city players. In Shanghai and Beijing, where you have populations of more than 30 million, good games are very popular. It must be a fun game; you can't be successful in China otherwise. You need to have good art and music, then players will like it.” 

"Whether it’s a role playing game (RPG) or action game or card game, you have to have special effects and those effects need to be stable,” advised Cheng Li, CEO, 91ku Network, based in Shanghai. 

Ye of Sincetimes agreed, sharing that the company has been investing more in music and aesthetic design in recent months. Louis Lu, CEO, XiaoXU Game Audio Studio, which has provided audio for Defense of the Ancients (DotA) games, calls music and sound effects 'crucial' to the mobile game experience, especially for action games. 

“The higher quality the audio, the better the retention,” he said. "Players usually turn off the music when they are playing web games, but not when they play mobile games, some mobile gamers even use headphones.”

Voice effects are an emerging trend, he added. "More games have voices in them now, such as in Legends of DoTA which we worked on. It brings a closer affinity to the game and a sense of immersion to players,” he said.

Think freemium

Zhouying Dai, General Partner, CA Venture, a venture capitalist which has brought Japanese games to China, stressed that overseas game developers simply cannot repeat what made them successful in their home countries in China, and expect success. 

He said: "There are many rich Chinese but they don't want to pay much, whereas in Japan even the man in the street will pay to play. You must change the payment structure, and can't monitor revenues in real time.” 

“Chinese users don't want to pay for the game, freemium models are preferred,” agreed Jiang. 

Li also emphasised that free downloads is essential for mobile game success in China. "The first thing is to get users to do a trial," he advised. "You must offer it free initially. Users do not want to pay for downloads."

Ye of Sincetimes noted that the top 10 paid games in China, have fewer than 1,000 players per game. "You have to provide free downloads and sell through equipment acquisition and in-app ads,” he said. "Overseas companies have to pay attention to these business models, and they have to have a good partner.”

Wang of Dianru further pointed out that a deeper understanding of the customer is essential. “Know where your players come from and what platforms they use,” he said. 

Li also suggested analysing user statistics to guide decisions. "You have to collect user statistics and judge the game that way," he said.

Dai also suggested creating a ‘VIP’ class of gamers for exclusivity. “That's preferred by Chinese players, and will help to achieve success in China." 

"Chinese play to compete, to show off,” added Ms Jin Liu, Director, Mokylin. “They compare themselves mentally with their companions. Features that help gamers to show off help to gain revenues.” 

Partnering is better

Wang noted that channels are a key element for the success of a game. "You need to do your research on distribution channels. For China we have 10 major game distributors and hundreds of smaller ones," he said. “Marketing and promotion are important; you need to let the players know about the games.”

Jiang believes that collaboration with a Chinese game company is the quickest way to penetrate the Chinese market. Qihoo was behind introducing the globally-popular Plant vs Zombie 2 game to the local market, where it saw 10 million downloads in 36 hours, he noted.

"We can translate your source code for China and adapt it. This is the approach that we used with Japanese game developers,” he said.

“Open your source code for localisation. You need to trust your Chinese team,” Dai advised. "You may need an agent to help."

Despite the potential customer base in China, it is not a get-rich-quick business. Ni advised overseas developers to hold a long-term view for their Chinese investment. “Don’t expect success in three months. It takes time,” he said.

Shifting trends

Jiang of Qihoo said that gaming is a key growth engine for the company, and that hardcore gaming, where players subscribe to play, is on the rise. “Seventy percent of game revenue comes from hardcore games, and the rest from casual games,” he said.

Hardcore gamers make up just 8% of the market, however. Jiang said this percentage will increase significantly in the next two years. 

“Game developers have to learn quickly to support hardcore users. Let's not forget that their ability to pay is much higher,” iAppPay's Qiu pointed out. The company shifted its focus to hardcore gaming in 2014. 

IP games, spinoffs based on existing intellectual property, such as a book, comic, movie or TV series, are another emerging trend in China, Jiang said. "This year we have seen novels and cartoons turned into IP games, Running Man* from Korea and My Love from the Star, also known as You Who Came from the Stars* for example,” he said.

**Both are popular TV series in Korea.