Friday, October 22, 2021

What we can learn from China’s mobile gaming economy – TechCrunch

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The mobile game The economy has been in a state of flux for the past few years and it has become quite difficult to predict what will come next. China has had its own unique set of problems, mainly stemming from the nation’s desire to control the market and provide more security and privacy to all parties.

Despite this, the Chinese mobile economy has continued to prosper for the past 18 months. The past year was an important one for China’s mobile scene, as mobile app publishers found new audiences and explored new mobile advertising channels, many of which are here to stay. 681.7 million mobile gamers were reported in China in 2020. To add to this, the country also lead the way for gross revenue, accounting for more than 35% of worldwide mobile gaming revenue in 2020.

Western publishers have taken note, but recent regulatory crackdowns have caused some to pause. What can be done to address some of these concerns and help open the market to game publishers around the world?

China’s top developers are going global

It can be argued that Chinese tech giants like Tencent and Netease have seen these restrictions as an eventuality and acted accordingly by investing in and acquiring global studios. Tencent alone has invested in more than 30 game companies, including Roblox, Supercell, Riot, and Voodoo.

Chinese publishers employing a global strategy increased their revenue by 36.7% in 2020 and they are earning more revenue in international markets than in China. Part of this is because publishers are moving away from ISBN restricted games with in-app purchases (IAP) to free games for fans (F2P) with well-executed ad monetization models.

Given that mobile gaming giants like Zynga and Scopely have a winning formula for gaming intellectual property, as well as extensive resources, there is an opening in the market for cross-platform growth. To be clear, it is an ambitious goal, but it could be seen as a necessity to sustain user and revenue growth.

What Western publishers are learning from China

Publishers wanting to go East are seeing the success of Chinese studios leveraging intellectual property (IP) like Journey to the West in their home markets. Zynga has realized this and is making smart investments in the market with intellectual property titles to Harry Potter and an upcoming Star Wars mobile game.

Kabam’s Marvel IP has also been successful, with their game F2P Contest of Champions tops US charts for licensed mobile action games. Later, Kabam partnered with Netease and localized the game for the Chinese market.

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