China boasts the world’s fastest growing market for mobile devices and, like in the rest of the world, games dominate the amount of time users spend in apps. The top publishers there already include overseas companies like Electronic Arts, Gameloft, Glu and Rovio, and launch of WeChat‘s gaming platform in July promises even more opportunities for foreign game developers.
The flip side, however, is that competition is very intense. In order to succeed, developers have to localize successfully. Localizing for China’s mobile gamers, however, doesn’t just mean making adjustments to language and graphics. Publishers also have to consider factors like bandwidth limits for individual users that are highly constrained by the standards of other countries and the right distribution channels in an extremely fragmented app marketplace.
Finding the right payment channel
Wandoujia, one of China’s top third-party Android app stores with 200 million users, said in its November report that even though 200,000 people downloaded Supercell’s latest game, Clash of Clans, none were able to purchase gems, the in-game currency. Clash of Clans asked users to install the Google Play store but then denied the validity of their account because Google’s app store doesn’t support paid apps in China.
To avoid making the same mistake, other game developers need to figure out a China-friendly payment system instead of using Google’s in-app billing system. Options include working with a local partner, such as Redpoint Ventures and Legend Capital-backed iDreamSky, which publishes Halfbrick’s Fruit Ninja and Imangi’s Temple Run in China, and setting up billing through mobile carriers, AliPay or through third-party Android app stores.
Getting the right payment system, however, doesn’t mean that players will actually use it. Mobile gamers in China are reluctant to make in-app purchases, especially in casual games like Candy Crush (though they are more willing to spend money in MMORPG titles). iDreamSky co-founder and executive vice president Jeff Lyndon told me that his company gets 40 to 60 customer service calls per day from players confused about in-app offers.
“They ask ‘why is your game asking me for money?’ They’re just wondering, but that’s not the kind of question you would get in the Western or Korean market,” he says. “There they might complain that a game is overdoing the monetization, but we don’t get questions like ‘why do I have to pay?’”
Lyndon says that one of the main reasons for piracy and clones is because the original game is priced too high for the market. Another reason is when players can’t find legitimate versions of popular games because developers decided to work with just one or two of the top distributors (Gameloft China‘s CEO Eric Tan said during the TechNode/TechCrunch panel that there are 102 possible distribution channel for the company’s games, including mobile carriers and third-party app stores)
“Some legitimate brands want to work only with the top channels, or just one channel, and they won’t work with others. It may make business sense at first, but in the long run the other guys are going to want to get a cut and they will do something about it,” says Lyndon.
Distribution and data
Ensuring that Fruit Ninja is available through multiple channels helped reduce the fruit-slicing game’s Chinese clones from 40 to zero, says Lyndon. The distribution strategy has proven successful for Halfbrick. Phil Larsen, the company’s CMO, told me that China currently delivers about 30% of Fruit Ninja’s revenue. That figure could “easily be over 50% by the end of 2014,” when the game marks its third anniversary in China.
In addition to figuring out the right combination of distribution platforms, game developers also have to deal with limited bandwidth. Data is relatively more expensive compared to average salaries in China. For example, Lyndon says, the average Chinese smartphone user pays about $100 USD, or 15% of a $656 monthly salary, for a 3G data plan. A U.S. user, on the other hand, can pay just $50, or 1.5% of a $3,263 monthly salary, and enjoy LTE. Game companies also need to remember that there is a wide difference in income between earners in major coastal cities like Shanghai and Beijing, and those in other provinces.
“The difference between a 50MB game and 90MB game in China is pretty huge and we need to think about that,” says Larsen. “In the U.S. it’s not a big deal but in China it can be the deciding factor for a player.”
One solution is to break games into smaller packages. Zhou Xin of PopCap China said the company has had to shrink game packages from 7MB to 2MB, then compress them even further to 1MB. Though these games might not have full features or HD graphics, “at least we can still get some user experience,” he said.
Being mindful of game sizes and monetization strategies is just as important–if not more so–than localizing content.
“In China, 50MB is still a decent amount of data. So we focus our attention on that, in addition to just adding stuff to Fruit Ninja like Chinese fruit, Chinese backgrounds, Chinese blades,” says Lyndon. “What localization actually means, and what we should focus on, is not changing the game on the surface, but figuring out how to make it easier to approach.”