After a brief hiatus in 2008, GDC China returned in 2009 with a three-day conference held in Shanghai, and TriplePoint was there to soak it all in. We were bowled over by Shanghai’s incredibly dynamic spirit and international influences, not to mention some of the best food we’ve ever consumed (seriously). There is so much to learn, and the trends below represent the tip of the iceberg; we can’t wait to return next year and continue our education about the world’s largest gaming market.
Here are a few key takeaways from our experience:
The Chinese market presents massive opportunities
The opportunities for Chinese developers and publishers within China are vast, and many are choosing to focus on this market rather than looking Westward. With over 330 million Internet users and an audience passionate about online games, the challenges of localization, culturalization and operating in the US don’t need to be solved right now. The US market has almost 200 million Internet users, and a developer must capture at least 2% of the online gaming audience to become profitable, whereas developers in China must capture only 0.2% – 0.8% of the online gaming market to become financially successful. And the market is growing rapidly, with a projected size is $900 million by the end of 2009, up over 39% from last year. That’s not to say that our market doesn’t matter: Some say that the Chinese online gaming space could be saturated in two years, prompting movement into the US and Europe, and the leading companies are exploring opportunities now.
Government politics play a large part in the games industry
The political situation surrounding World of Warcraft in China was a hot topic while we were at GDC, and remains so, with operator NetEase caught in the middle of a battle for control between the Ministry of Culture and the General Administration of Press and Publications (GAPP). The outcome remains to be seen, and will impact any games operated in China. For the latest, we recommend this article: http://www.google.com/hostednews/ap/article/ALeqM5hU1YNKGtJmAZA0DGIvMUXrAyurlwD9BOPRIO0
Avoiding risky business by playing it safe
In the Western world, original IP is king. We associate creativity, value and integrity with original IP and unique gameplay. In Milan, Italy at the second annual Italian Game Developers Conference in early October, we witnessed the value and importance associated with creating and owning original IP. In the Chinese gaming market, it’s quite different and according to several sources, developers struggle to secure investment funding for their original IP. Instead, proposing to develop a product similar to an existing successful game demonstrates less risk to potential investors and results in a higher chance of receiving funding. Additionally, from a marketing perspective, it’s generally believed that a game in line with existing trends will garner success in the market.
Roots run deep and come to life in games
Chinese history and culture are common themes in online games, as reflected by such titles as Fantasy Westward Journey, Sangokushi Online, Zhengtu and Sho Online. During conversations with developers and publishers, we heard many times that games with references to Chinese history or culture will not resonate with Western audiences, and therefore have little relevance for other parts of the world. Korea-based publisher, Joymax, has experienced success attracting international audiences with their free-to-play MMORPG, Silkroad Online, which draws in players from 180 countries from around the world. It appears that there is a potential opportunity for Chinese developers to explore publishing historically-based games in other markets.
New platform developments on the forefront
Around the time of the conference, Unicom announced the launch date for the iPhone in the Chinese market, opening the door to this mobile platform for game developers in China. While iPhone game development wasn’t a focus at the conference, it’s certainly a new market opportunity and it will be fascinating to see how the platform fares. Additionally, we spoke with several developers creating social games, primarily for Facebook, even though the site is blocked in China. Chinese developers are testing out social games by launching them on U.S.-focused social networks, which they then monetize, and leverage the results for building social games for the Chinese social networks. A big difference between social networks in China and the U.S. is that the Chinese social networks require that you submit your social game application for review before it is published on the site, so testing and fine tuning applications in the open publishing platform of Facebook is highly valuable.
What’s next? And the big opportunities
It was apparent at this year’s GDC China that there are numerous opportunities for both Chinese and U.S. game developers in each market and that both sides may be looking to expand in the near future. The general feel from the conference was that China is looking forward to the opportunities presented within the games market, such as new platforms and new distribution channels. The attitude can be summed up by a response to our appreciation for the Shanghai skyline: “It’s impressive now, but just wait until 2010!”
Written by Kate Pietrelli and Eddiemae Jukes