Saturday, December 25, 2010

Facebook has serious competition in China

You would think that the Chinese would be grabbing hold of Facebook and Twitter as fast as they have with our sports, clubbing, and other Western-style decadent cultural influences. They love American-everything. Yet Facebook and especially Twitter are but Pinto cars to China's fast growing Social Networking giants, RenRen and Qzone. Kaixin001 and round out the four social networking giants in China.

I've spent much of the Christmas holiday chatting with friends from all over the world on dozens of social networks. Nearly every week I find another social network, never mind the games found on those networks. Sure, you could use a select few to connect to virtually everyone around the globe, but just about each country has their own networks that often cater in special ways (language being the primary) that simply aren't offered on others.

RenRen in China is particularly an interesting case. Originally called 'Xiaonei', it's almost a virtual copy of Facebook. That's not really surprising in itself, considering that China copies quite a bit of Western technologies and ideas. They split off from the core technology and get rather unique in how they market the product, considering it a way to restore long-lost friendships and discover the true inner core of one's person through connecting with strangers in nearby cities.

Kaixin001 has been marketed more toward white-collar works and social games than RenRen's friend factor. For the past few years, Qzone has connected closely with QQ, China's primary instant messaging service, and has become a major social network for young teens and particularly rural users that may have spotty internet connections (which isn't a surprising element in even China's urban centers). used to be more popular than all the others, but has since begun a rapid decline back in 2008.

If you want to hook up with someone from China, Qzone is the way to go, for now. It has the largest social network by far and a great way to hook up with those already using the QQ instant messaging service. However, don't expect it to be an all-in-one service like Facebook that provides a lot of interesting games on the side. It is also weak on more in-depth search capabilities for university students looking to share information. Go to RenRen for that.

Much like Facebook is fast becoming an all-in-one giant in the West, RenRen is increasingly becoming popular for a wider range of users in China and nibbling at Qzone's market share. It may not be long before RenRen encroaches on Facebook's territory and an interesting international social networking war begins. The irony is that Facebook started as a university networking tool, while RenRen is becoming one in the end.

Sunday, December 12, 2010

Chinese exporting an increasing list of games

Games are one of the few mediums of entertainment in the West where the influence of the East has been profoundly felt. Nintendo, Sega, Square-Enix, and countless other Japanese game companies have been in the enviable position of actually shaping the tastes of western gamers for decades. Although that influence has waned—in fact, there has been much talk of a game development crisis in Japan—no one would bother denying that the way we game today owes as much to Japan as it does to native influences such as Atari, Activision-Blizzard, and Zynga.

And while Japan may be stumbling, no one questions that China is on the world superpower fast track. Could this be the next Eastern game industry giant? China is already the world’s largest gaming market, and an emerging tech powerhouse. The phrase “Chinese Exports” usually conjures images of plastic widgets slathered in toxic paint, but this is more of a PR problem than a fair representation of the state of Chinese product development. Anyone with real knowledge of the market forces (skilled workforce, relatively low wages, room for expansion, government support) knows that China is already on its way to being a major player in the tech industry worldwide.

But what of games? The truth is, the wave of Chinese game exports is already underway and has been growing steadily over the last four years. Starting from two or three companies exporting games in 2006, there are now dozens of major Chinese game companies involved, many of them operating multiple games overseas. And while the blistering pace of growth in the Chinese domestic game market has slowed recently, revenue earned by Chinese game companies in overseas markets continues to grow by as much as 20% annually. As such, overseas profits are becoming a major strategy focus as the domestic market grows more competitive.

The numbers don’t lie: they are among us. But, where exactly? We have yet to see a major Chinese gaming hit to focus everyone’s attention on this phenomenon, and even moderately successful games have often avoided branding themselves as Chinese, which further reduces visibility. But they’re out there. Social game developers Five Minutes and Rekoo have been able to boast millions of monthly active users on Facebook, while Taiwanese-produced Runes of Magic has garnered praise as one of the highest quality F2P MMORPGs available. Beijing-based Perfect World (Nasdaq: PWRD), perhaps the most aggressive and forward-thinking participant in this trend, has a whole slew of F2P MMO titles and a 150-employee marketing, service and operations center in Silicon Valley. Though Perfect World’s overseas revenues have flagged recently, they still hit USD 7.8 million in Q3 2010, accounting for 7.4% of the company’s total. On a more ignominious note, the oft-ridiculed yet highly profitable strategy web-game Evony is a Chinese product. So, be warned, the Chinese invasion is on, and promises to bring dozens, if not hundreds, of new titles into the twitchy hands of western gamers with every passing year.


Sunday, November 14, 2010

China's game industry is bursting at the seams

I was reading a few articles earlier this morning about how much smaller the Chinese game industry is compared to the West's. This is changing. Soon we'll be seeing a monster of a game industry in China the likes of which hasn't been seen since the rise of electronic entertainment itself.

Like many industry's in China, growth is at 10% per year or better and outpacing many competitor's in nearly all areas. The Chinese game industry is one of the highest growth industries right now in the country. Kingsoft, one of China's big publisher and R&D investor, grew 100% last year alone. Network development costs, as well as huge salary increases, are all signs that China's game industry is growing just about as fast as it possibly can.

The burden to China's game industry right now is not a lack of monetary resources, but a lack of robust talent and expertise. Hiring is at a run-away pace and production is up in nearly every studio. They're all crying for more quality production materials, communications access, and talented employees able to get the job done.

What's made the tremendous growth especially painful is the constant shift in the attitude of the Chinese towards a certain genre of games. The last couple of years we saw interest in Massively Multiplayer Online games, specifically Role-Playing ones like World of Warcraft and Lineage 2. Now we're seeing a rather jarring shift toward more casual, browser-based games, especially as more and more Chinese gain access to the Internet from their homes instead of stuffy basement-like Internet cafes.

Even though it may seem at times that the Chinese game industry is building upon itself, it's still largely being driven by American and European companies. The Chinese game industry is projected to continue double-digit growth for the next several years. They are going to need more than ever our expertise and experience, just as much as we need them right now for raw material goods.

Friday, November 12, 2010

Asian Games begin in Guangzhou, China

The 16th Asian Games (, part of the worldwide Olympic movement and governed by the Olympic Council of Asia (OCA), will has the final rehearsal for the Opening Ceremony this evening – now two days away before the Games begin.

The Asian Games are the second largest sports event in the world after the Summer Olympic Games.

Xu Ruisheng, deputy mayor of Guangzhou lauded the praise of civic and games organizers, saying that Guangzhou has “the highest standards of water and electricity supply, smooth urban traffic and air, water and living environment quality. Guangzhou is ready to extend its welcoming hands”.

Timothy Tsun-Ting Fok, vice president of Olympic Council of Asia, said that the upcoming Guangzhou Asian Games will be the best one in history.

"Guangzhou once hosted the most successful National Games, and I'm sure it will also present the best Asian Games this time. The Asian Games provides a rare opportunity for Guangzhou to showcase its brand-new side. The whole world will share this rare opportunity. The entire city of Guangzhou will enjoy this historic moment," said Fok, who also serves as the president of the Olympic Committee of Hong Kong, China.

The 16th Asian Games are ready to dazzle the three million spectators set to watch all of the competition and billions of TV viewers across Asia and around the globe with 53 competition venues and 17 training stadiums ready to go. Guangzhou city is locked down well in advance of Friday's opening ceremony, and the completion of test events for all 42 sports.

Games officials announced that a record number of doping tests will be carried out at the Games. “The Olympic Council of Asia plans for some 1,500 urine tests and probably more than 200 blood tests at the Asian Games which is expected to attract nearly 12,000 athletes from 45 countries and regions during November 12-27”, according to Zhao Jian, deputy head of China’s Anti-Doping Agency.

"The tests will be carried out according to Olympic standards," Zhao said. Testing started on Saturday in the Athletes Village and each morning a flight will carry the samples to the Beijing lab where about 5,000 tests were done during the Beijing Olympic Games.

"The negative reports return in 24 hours and for the positive ones, 48 hours," said Zhao.

The China Anti-doping Agency fielded 81 doping test officials, most of them serving the Beijing Summer Olympics, to the Asian Games as well as 11 international officials recommended by the OCA. The organizers also recruited 600 escorts and volunteers into the anti-doping force.
Games officials also announced that during The 16th Asian Games some 3,989 medals will be awarded. The medals for The 16th Asian Games take its theme from the ancient Silk Road and are a positive fusing of the Games and emblem of the OCA together with graphics depicting the Guangzhou city flower … the red kapok.

Featuring the OCA logo of the dancing dragon and soaring hawk, the medals also depicts the OCA’s shining sun visual effect through a bowstring grain design that expresses the core elements of The 16th Asian Games – the bright sun and the delicate Red Kapok flower.
Each of the award ceremony elements have been meticulously prepared to the finest details include all of the medals, certificates, flowers, awards platform, pallets and background boards used as well as specific sizes for each national flag, timed national anthems and opening award ceremony music.

The 16th Asian Games awards bouquet will consist mainly of gladiolus, red ear crown composition, plus crystal grass, blue leaf, turtle bamboo or golden bowl anise for accent decoration.

There are 39 Asian Games ceremony work teams with 1,166 workers, 146 team workers, 380 awards etiquette staff, 250 flag-raising staff and 390 general volunteers.
Games organizers spent one year searching across China for the young ladies that would participate in the award ceremonies. The search committee traveled to more than 110 universities and ultimately selected 380 individuals to become official Asian Games awards etiquette volunteers.

The flag raising staff come from Guangdong Armed Police Department, Guangzhou military region and Hong Kong units. When the Asian Games begin, 380 awards etiquette and 250 flag-raising staff will work together to form 23 ceremony professional volunteer teams.


Sunday, October 31, 2010

A familiar city, Guangzhou tourism prospers

I giddily explored not just the cities around China for a year, but many throughout Southeast Asia. One of my more favorite cities was Guangzhou, just north of the city I lived for a year, Shenzhen. Guangzhou had it's special charm, partly because it provided just about everything else Shenzhen didn't.

I came across news recently about the city increasing in tourism and recreational activities. One particular is the new Asian Para Games. It is a multi-sport event held every four years after every Asian Games for athletes with physical disabilities. The city is also building a new convention center for this purpose.

Not only that, but the city is also specifically building a recreational park that caters to the high tech industry. In that park will feature numerous Internet cafes and electronic stores that focus heavily on gaming. Best Buy may even make an appearance in the next few years... it already has a store in Beijing and Shanghai.

I'm not only happy to see that a city I enjoyed visiting frequently is doing so well, but that it is pushing China's frontier in electronics and gaming, not to mention good social policies. I can't wait to revisit in the next few years and participate in one of the inevitable gaming tournaments that will surely sprout up!

Sunday, October 10, 2010

Chinese gamers growing "weary of the monotony" of MMORPGs

I found this blog post at quite interesting in terms of the social shifts we're seeing all across the world in what games player's are going after. No longer are even the Asian's content with drawn out and repetitive hardcore MMOs, once the bedrock of their gaming cafes and internet parlors.

The question I have is, how long will they last in the often even more repetitive casual market? Unless casual games change their tune, we'll see a demand for games that may start leaning more towards user-generated content than ever before. Anything to inject fresh content into games on a regular basis.

A report by Chinese market analyst Niko Partners believes that the country's gamers are shifting from hardcore MMOs towards a more casual experience, driven buy the "monotony of themes" and a need to engage with a wider variety of users.

Niko Partners, which specialises in analysis of the Chinese videogames market, believes that the casual sector will account for 30 per cent of all online gaming revenues in China by 2014, making it worth $3 billion (£1.89bn) a year.

Currently, Niko values the Chinese market at $3.8 billion (£2.4bn) a year, with casual gamers making up 23 per cent of that market. By 2014, Niko Partners expects there to be 141 million online gamers in China.

"We believe that the Chinese market has taken up SNS (social networking site) gaming in earnest, and that the hard-core gamers have shifted their preferences to include these games alongside the casual gamers who naturally appreciate them, " Niko Partners' Lisa Cosmas Hanson told

"The hardcore gamers are growing weary of the monotony of themes in the Chinese MMORPGs, and they want to extend their social interactions to games that attract a more diverse user base. People want to play games that enable them to have something to bond over when chatting with schoolmates or colleagues at the water cooler."

Sunday, October 3, 2010

NetEase dominates Chinese online games providers

China is the world's largest market for Internet users by far (what market isn't the largest in China nowadays). Online game sales in China rose just over 30 percent to 27 billion Yuan last year, according to Shanghai-based IResearch.

NetEase is China's third-largest online games provider, soon to be second according to many analysts. NetEase provides games such as "Heroes of Tang Dynasty", a growing interest in many other Asian countries, and possibly soon in the West.

What's astonishing is the percentage of Western online games in China's market. For example, World of Warcraft accounted for almost 30 percent of NetEases's sales earlier this year, marketing the largest percentage by far for any single game.

American and Chinese game companies are working closer together than ever before. It was announced earlier this year that NetEase will be partnering with Microsoft in MSN's China operation, investing heavily in China's online game industry.

Microsoft wants to continue to push PC gaming, just as much as it has with console gaming in recent years. "The PC isn't dead" has been heard many times from them. Perhaps investing in China's PC dominated industry, is a step in this direction.

NetEase reference:

Sunday, August 29, 2010

China’s Online Gaming Industry's Demographic Battle

I thought the following article by Russell Flannery was thought-provoking and a bit surprising actually, as it suggested the slowing or even stalling of the game industry in China. I certainly hope it's a temporary stall, because for my long-term career it is one of my goals to bridge the Asian and Western gaming markets, starting with China.

The article shifts to how games are developed in China. A lot of the times they are blatantly copied. I've seen it first-hand. It's unfortunate, but that's how they develop a lot of products, and not just with computer games. Walk any of the major market centers and someone will flash you a handful of copied operating system software packages for a "new laptop" he also wants to sell you.

Russell points out several options the Chinese game industry has to grow, including expanding into the TV/Film industry, as well literature-based projects. In the end, it will depend on how the Chinese game industry adepts to its current problems of piracy and respect to original IP. If they can succeed in creating a long-term solution that is foreign-business friendly, the industry will take off.

China’s online gaming industry has exploded into a multi-billion-dollar business in the past few years, fueled by growing numbers of young Internet users. Yet growth appears to be slowing. iResearch, one of China’s top Internet market research companies, says revenue growth industry rose only 8.8% in the second quarter of this year, down from about some 30% for all of last year. What’s ahead for the industry? Forbes talked to Xufeng Zhao, a senior analyst at iResearch. Excerpts follow.

Forbes: China’s online gaming industry industry has been enjoying double-digit growth for many years. Will it continue?

Zhao: You can look at the industry outlook from several points of view. Technologically, China is behind other countries. Marketing is about average. Companies’ understanding of customers is relatively low. Therefore, a reason why the industry has been growing has been because of growth in the population of online game players.

But that isn’t going to be growing as fast. Mao Zedong once talked about “glorious mothers,” and encouraged a lot of births. That has helped to increase China’s population from 400 million to more than a billion. Starting around a decade ago, it created a great opportunity for the online game industry, as children became old enough to play. Demand has been great, and companies didn’t need to think too much about content.

Now, those same people that had time to play games for so many years are older. They are getting married, and having kids. They’re under a lot of pressure. You need time to play games, and they don’t have time. My husband loves to play games, but he has no time. Even if the ads for these games are great, people don’t have time. The number of younger players isn’t likely to replace the number of older people that played a lot but no longer have much time. Growth in the industry is going to be slower.

Q. What companies are going to outperform?

A. We have to think of things in terms of first-, second- and third-tier companies. The third tier is companies that just copy others’ games. If you spend 500,000 RMB for a game, I’ll copy you and spend 50,000 RMB. It doesn’t take much money. Second-tier companies are thinking about their own brand, and whether they want to spend to have their own influence. First-tier companies have their own games and integrated production.

Q. Which companies in China are better positioned to succeed?

A. Companies that can integrate from games into other types of entertainment and platforms will perform best, but nobody knows the best way to do it. Disney has had success, but the starting point for companies here is different. Shanda has made many investments, and is trying. But will they succeed? It isn’t inevitable that they will.

Q. Companies such as Perfect World have been talking about expanding into films. What are the prospects?

A. Revenue for online gaming companies right now totals around 20 billion yuan annually. For films, it’s a growing but relatively small number. I’m not saying that gaming companies can’t make money from films but it will be relatively small and it will just be a way for them to package their games and other content.

Q. What will come of efforts by companies such as Shanda to create a literature business?

A. Whether any literature is successful will depend on how it’s ultimately packaged. It’s not only the value of any literature itself that involved. If Shanda only generates money from one-at-time sales, then it will be a failure. The greatest value from literature is that it is an invisible asset. The real question is how you can later integrate it into your production chain. How can you create more value from something that starts out as a book? So for Shanda, what I can say at least for now is that they are trying to do that — integrate. They are ahead of others.

Sunday, August 15, 2010

Chinese Gamer Focus Group Findings

Nike Partners released a focus group finding last week that mirrored a lot of what I suspected was inevitably going to happen in China, not only in the communities that traditionally have been hardcore and more communal in general, but what's also been happening in the United States for years now.

Findings ranged from the migration of hard-core male gamers to F2P or casual games, as well as increasing boredom of Chinese hard-core gamers with existing MMORPGs such as World of Warcraft or EverQuest. And not too surprising given the increase in wealth of the Chinese, a tendency to play from home on fancy new gaming systems.

Niko outlines four key points that I'll respond to in turn (all of which are really quite obvious and expected without a survey from my own viewpoint):

Why spending per gamer is falling as the number of gamers is rising

The economy certainly has influence, as well as the continued growth in China's population. The migration from monthly (or in the case of the Chinese, hourly) fees to F2P games is surely another cause.

Why online game operators need to heed the success of SNS games

SNS games are being played more often, so online game operators naturally should account for this growth and tweak their services accordingly, if they want to survive and even profit from the transition.

What the differences are in gamer behavior between cities of different tiers

This is perhaps the most complicated of the four. I've been to all the major cities in China, and I have to say that each one is very different in any given category you wish to pick from, including the game industry.

For example, Beijing has a growing but a more classical gamer base, while Shanghai is rapidly becoming the hotbed of the Chinese game industry in both classical and new-age forms. I compare these two cities to Boston and New York, respectively.

What the reality is about Internet café usage

Chinese Internet cafe's are often a mysterious product of a low-income, gamer-rich culture. They are typically hidden away deep within the bowls of major cities, only being found by the hardiest and most desperate gamers out there.

I happened upon a few by accident and came across a rather low-key atmosphere. Everyone essentially kept to themselves, even though they were right next to each other. I would compare it to attempting to setup a game LAN party in your mother's basement, while your mother is home. It can be fun, but is obviously limiting.

With incomes gradually rising in China, I can only surmise that Internet cafe usage will steadily decline. However, I make some reservations on this, understanding that the density of Chinese cities afford a new way of looking at how one spends time outside of the home, irregardless of what is available in that home.

You can find the Niko press release on Gamasutra here:

Sunday, August 8, 2010

Chinese Board Gamers

I usually write on this blog during the weekends, so it came as a bit of a surprise when I was searching for work related information related to Petroglyph's recent board game releases, when I discovered that Asians, especially Chinese, were quite the board gamers also!

There were several articles discussing how even hard-core computer gamers are ditching Internet Cafes and home computers and turning toward "Board Game Cafes". Think a bunch of tables with board games in a cafe and you get the idea. I picture it like my grandparents bingo halls, but a notch more "new-age".

While the Chinese have always had a fascination for classic board games such as Mahjong, Xiangqi (Chess), Go, and many others, they have taken interest in newer board games, including Petroglyph's own 'Panzer General: Allied Assault'. They are particularly interested in our fantasy version, Guardians of Graxia.

While in Shenzhen, I spent many hours stopping at board games being played randomly along the street and asked to join in. If you're interested in learning what Chinese gaming culture is about, you don't need to go to stuffy Internet Cafes. Sit down with a group of board gamers and you'll learn a lot more than you may expect.

Sunday, August 1, 2010

Real names in China's online world

Who would have thought that the Chinese government would eventually require everyone to use their real names? Well, at least it's a surprise when it comes to requiring gamers to log into online chat rooms with them, officially starting August 1st. A few weeks ago we had a similar requirement in the United States, albeit briefly, by Blizzard. Outcry by forum users about their naming policy almost sent the entire industry into a war for a brief moment, but then cooler heads prevailed and Blizzard receded their policy.

So why is China pushing so hard on its policy, which in some cases has actually be in effect for months now? Population. China has an online video game user population of over 265 million, approaching that of the population of the entire United States. Revenue for online games grew by over 100 percent last year alone. With problems of population grow in all sectors, the government has found it much easier to control its citizens online if they, naturally, knew who they were. The crux of the problem though is identifying everyone.

It's meaningless to put into policy a system that can be easily circumvented by a quick change of ones name. One day I could be John, the next, Lee, and the next, Kent. Fortunately, China has little concern in implementing a state identification system. Once fully in place, real name policies will become the norm, and then policing of online games can begin. The question to ask is, it hasn't been needed in the United States, so really, why is it seemingly needed there?

Sunday, July 18, 2010

A new market awaits the game industry

Ever have a moment where you're playing the newest game and realize it just isn't as fun as some of those you used to play a decade ago? Why do we always look back on things in life and say to ourselves, "Those were the good times". Another good place to base examples from is my past experiences in China. I look back at the "good times" (and they truly were good times) in America when I would spend countless weekends with my LAN friends playing all sorts of games.

Humans simply become bored with what is the same. Many older games are still intriguing because they have a unique style built into them that is lacking in many games today. Adventure games were all the rage in the 90s, but are practically non-existent today. Even those that do show up from time-to-time are shallow structures of what was once a great genre. Let's bring those old games back in a new and fresh light, without ruining the genre please!

I remember when the movie "Neverending Story III" came out years ago. I was so excited to see the series continue, I happily bought it as soon as it went on store shelves. Upon watching the sequel I never quite looked at the series the same way again. I had developed a bad taste in my mouth from the incredibly horrible remake, that it simply ruined the rest of the series. It took me literally years to watch the originals again with any sort of respect.

That is the problem with many remakes in the game industry today. There are so few that are as good as the originals... so few period. Starcraft 2 just came out, but that is being made by Blizzard, one of the companies that knows a thing or two about game development and success in the market (not to mention a huge fan-base ready to buy anything they make, regardless). Hundreds of old games that are long forgotten by past generations, and completely non-existent in the minds of current generations of gamers, are waiting to be remade in a better and bigger way, and sold for a price all over again to those curious.

Allow me to briefly clarify what I mean by a "remake". Some games simply deserve a graphics makeover, while others deserve some tweaks beyond the visuals. My adage is always "don't fix what isn't broken", so as long as developers keep that in mind as well, remakes could be very successful.

The redevelopment of old games could easily progress into an entire new genre of computer games and console games developed over the coming decade. I would call this genre "The Transformers", old games that have been forgotten and are now transformed into new games that are given a new life again on store shelves. A cliche in terms maybe, but a good one I think.

Get to it developers! Find those old games, remake them in a new way, and sell them again to customers looking for fresh and "new" games that set themselves apart from many of the bland clones we see today.

Sunday, July 11, 2010

Getting A Game Studio Started In China had an interesting article recently that discussed some key points on how western game studios can best establish themselves in the Chinese market, particularly pointing out some of the pitfalls that come with establishing companies in a new market. I thought the following points were especially interesting to read. Take point 2. particularly closely, as this one reaches into all areas of foreign investment and business establishment in China:

1. In addition to the major players the author mentions, other publicly listed companies that deserve a mention are Tencent, the leader in the casual games space with its QQ Game platform, and CDC Games, who have been quite successful operating "Yulgang" through their 17game subsidiary. They also recently announced that they have licensed the MMOG, "Lord of the Rings" [LOTR], which should launch in China later in 2007 or early 2008.

2. One of the reasons why the western publishers such as Electronic Arts (ERTS) struggle in China is that due to regulatory issues they can't directly publish online games so they need to work with a local partner. Korean companies such as NC Soft who have licensed numerous games to Chinese companies are worth looking at. The game consoles (ie: Microsoft's (MSFT) Xbox, Sony's (SNE) PS3 etc) has too many issues at this point (regulatory, piracy, business model) so the market will continue to be PC-game dominated for the foreseeable future.

3. A big issue for the Chinese games industry is the shortage of quality game developers, especially game designers, and low level of game developer education. While Netease (NTES) has been successful at developing their own 2D/ 2.5D titles no Chinese company has managed to develop a quality 3D title. Imitation still rules over innovation with many copycat games being developed.

4. I would expect all of the Chinese game companies, including Netease, to license foreign titles in the future. This is partly due to the poor state of the local game development industry as mentioned above, and also because WoW has shown that a lot of money can be made from licensing a blockbuster title even if royalties have to be paid out to a foreign party. Due to the risk averse nature of many of these companies they will try to secure western titles that have reached open beta testing or have already launched in the west, or are being developed by famous developers who already have a track record. While this lowers their risk it also means that they will likely have to pay higher licensing and royalties for these titles.

5. Expect to see more games operated on a "play for free, pay for items" model compared to the traditional subscription model. The Korean games industry has already moved in this direction and Shanda (SNDA) and CDC Games/ 17game have shown that it is a viable model in China.

The9 (NCTY) has had a good run with WoW and has licensed numerous upcoming titles but it is not obvious how a company that has essentially been operating one game could expect to be successfully operating up to six games within the next 18-24 months. Their strategy may be more to do with "locking up" as many of these titles as possible. While this may suit The9 it isn't good for their licensing partners, which makes them a poor "Chinese partner of choice".

Sunday, June 27, 2010

An Infant Chinese Game Industry

With China exploding in growth in all sectors of industry, you would expect game development to be doing the same. This hasn’t quite been the case in the degree that many foreign analysts expected, especially in terms of foreign penetration. Although the Chinese game industry overall is huge with vast potential for years of growth (not to mention a lot of tax revenue for the country itself), game development has ironically been hindered by the government and the people’s inherent social culture.

Game development is not allowed to have government support (but plenty of regulation), partly due to the government’s somewhat reputed belief that games are not socially functional or beneficial. Most western cultures would abject to this stance, firmly believing that its own citizens can and have benefited from the mental activity of playing games, not to mention again the taxation opportunities the industry is capable of generating. Much like the American and Indian movie industries, the game industry is seen by most other cultures, even in many parts of Asia, as a positive influence.

What is most disturbing about the Chinese government’s intervention is the blatant disregard for actually understanding the industry and its products. Just a few days ago, China’s Ministry of Culture introduced new online gaming regulations which only vaguely define what they consider as “unwholesome” content. The regulations also severely restrict play session times with the goal of stopping recent deaths resulting from gameplay “marathons” that can last days straight. While moderation can be said to be a good thing, these regulations blanket the entire industry and often ignore many of the positive potentials that are snuffed out.

On the consumer end, games in Asia have just as much of a different perspective. Very few Chinese games, or even any other Asian ones for that matter, display graphical blood effects, visibility of human bones (but not bones of another creature), and persona fighting in the reference of a person directly referencing their characters as their own while fighting another person in the same capacity. World of Warcraft was a recent victim of this difference in culture, as the latest expansion, Wrath of the Lich King, was restricted from being published until the game’s skeletons were covered up with flesh or clothing.

The later reference is more easily dealt with in foreign markets, while the former once is proving cumbersome for western game developers. Another problem that invades the Chinese government and its citizens is copyright ethics. The Chinese don’t much care about, or more pointedly can do anything effective to stop it, the rampant stealing of software. One of the more unfortunate results is the undermining of their culture with very young kids getting hold of games meant for a much older audience. This has resulted in addiction and even death in the few cases linked to the marathon gameplay sessions mentioned a moment ago.

Regardless of these issues, nothing is going to stop the ultimate engine that is the Chinese game industry. It will undoubtedly overtake all other international game markets in the not-too-distant future in terms of revenue, game development efforts, and sheer player count. Like many industries in China and all over Asia, the question will be whether foreign games are as accepted in China as much as most Asian games have been in western markets. Instead of western games reaching Asian audiences, we may unexpectedly find ourselves and our locally based games in the minority on local turf.

Sunday, June 20, 2010

An Industry Of Change

Just like any other industry, the game industry is a fluid and moving target that changes from year to year, even month to month in many cases. Over the years we’ve seen several shifts happening. The demographics of gamers have grown younger, games have been blessed with 3D graphics and 30” LCD monitors, the Internet has allowed us to share our experiences together, and porn has largely been removed from the game industry's advertisement toolbox (seriously).

THE HISTORY OF THE INDUSTRY (CGW Magazine 1984 Issue 14)

Thirty-one percent of gamers who used to play other types of games now play computer games almost exclusively. This net loss (27.5%) confirms what non-computer game companies have suspected: computer games have “stolen” their customers-or at least a good number of them.

What game type do you prefer playing?
(Bit-tech survey 2007)

First/Third Person Shooter: 48.53%
Real Time Strategy: 13.68%
RPG: 13.03%
Platform: 1.30%

It's interesting to note in the demographics above that gamers in the 80's were migrating to the PC from arcade and console systems, and that the shift from RPG and RTS games to FPS began not long after. Anyone in the industry today knows where everything is headed now. That is just one of the many changes the industry has since experienced.

In the early days of Computer Game World magazine (CGW) you could find porn advertisements on the back few pages. That should give you a good idea on how things have changed from then and now. It was a different world in the game industry five years ago, not to mention twenty-five years ago. Not only was porn advertising banished from the industry, but along with it went a primarily adult game player demographic (which makes sense then if porn was part of the industry), genres such as Adventure and Simulation, and fun games that were cheap and quick to make. What also left the industry was a general sense of what a good game was really all about.

The industry has changed, but has it changed for better or for worse? Losses of genres I loved, particularly the Adventure genre, were certainly a turn for the worst. And yes, some may say it hasn’t technically “died”, but it might as well have with the less-than-stellar and few-and-far-in-between releases we’ve seen this past decade. What has changed for the better though is technology, which gives us pretty and fast graphics, but also allows Indie developers to publish unique games that might never have otherwise made it into popular view. STEAM and other services are growing, which will allow even more distribution without the heavy-weight publishers helping hands. All of this will come together in the form of Virtual Worlds, giving everyone a chance to share their opinions on how things should progress.

GOING CASUAL - It’s a casual game market now

We’ve seen hundreds of “clones” in all genres the past several years, particularly in the First Person Shooter genre. Games that essentially play and feel like other games. How unique can FPS games possibly get, right? Well, I suspect they can be more unique than we simple players have seen lately, and more unique than the publishers realize as well. The developers have the ideas, but are they able and willing to release them into their games?

Whatever the reason for the clone market and the serious lack of unique games today (save for the once-in-awhile “Spore” type of game), it is throwing the industry into a spin that looks eerily familiar to how we view the movie industry today. There are more clones there too, and if you look closely, do you see what these clones are gravitating towards within their own genre? Simplicity--action packed mindless simplicity. And of course let’s not forget the pure eye-candy of it all. Those beautiful single colored textures that look like they were pulled straight out of a comic-book, or a cartoon.

That simplicity, while maybe not mindless in games, has a form in the industry, and that is in “Casual Games”. Some are good, such as the many online virtual worlds being developed, some are not so good, but they are increasing in numbers that rival any other genre. Fortunately, this is good for the industry as a whole. While we will likely never see Adventure or Simulation games in the spotlight again, they are still there, and part of that reason is through casual games. They bring in the masses, and when you are able to bring in a large group of players it is inevitable that some of those players will find other genres, even those that hardly exist.

THE FUTURE – And the Asians are going to dominate it (as they always have…)

The Chinese game market of nearly USD 900 million is expected to be worth more than USD 6 billion by 2011. The growing China game industry has more than 27 million gamers and there will be 60 million by 2011 consuming $1.8 billion of online games. Internet cafes are gathering places for teens and casual gaming is prevalent, especially with females. It is projected the Asian market will dominant other markets internationally sometime in the next decade, especially online games.

The modern game industry really started in Asia with Japan, and now it’s coming full circle around the globe right back, but this time stopping short and landing in countries like Korea and China. America and the EU might be popular now internationally, but as the years go by we will begin to see more and more Asian specific games going international. Everything changes at one time or another, as we’ll surely see the game industry change in the next few years in ways we have yet to predict.

Sunday, June 13, 2010

Asian vs. Western Online Game Industries


I had a recent discussion with an Asian game developer about the differences between game industries in various parts of the world, specifically related to Massive Multiplayer Online Games (MMOGs). With such an important topic put on the table I thought I’d expand upon our initial discussion and lay out my views on what I’ve seen in the industry between the Asian and Western markets. While I have only been in Asia for a year (so far), I have managed to see some interesting differences as well as similarities.

At first glance, many of you might conclude that since World of Warcraft is a world-wide phenomenon game industries are more similar than different. In some cases this is true, especially when it comes to the technical components of a game. Where the industries differ most is in their communities, how group members form relationships with each other, as well as how they view the games they play. Gameplay itself often has many unique qualities between the two markets.

Both industries are strong and growing at ever astonishing paces, especially the Asian market through their vast array of MMOGs. With Western games like World of Warcraft, we begin to see these two communities merge together as one. To better understand these differences let’s explore where they began as one, the key differences that make them unique, and touch upon what makes them ultimately a community of “one”.


Game studios in most parts of Asia, even the Korean market, are relatively new compared to Western and Japanese markets. One of the interesting trends I’ve noticed in not only games but in other entertainment products is the world-wide imitation of what the west already has to offer, mainly due to its maturity and past successes. Even the Western industry itself continually recycles its own works between development studios. I think this is a good thing overall, as long as there is fresh innovation to back up what was originally used.

However, often enough you will find Asian games that are extremely unique in their gameplay, such as Lineage from NCSoft or Conquer Online from TQ Digital. Western games often involve a rich storyline, a variety of objectives, with often hours involved in completing objectives in order to obtain an item that will directly impact your character’s progress. In the Asian market the pace is a lot quicker. Most games will reward you soon or immediately after accomplishing a simple task. Items are often reused and upgraded in various ways throughout your character’s progression. Unfortunately, this sometimes results in a more static game between the various levels, with little differences from beginners to elite characters.

This is not to say that Asian games are without their worth in advancing your character's abilities. High level rewards are certainly available, and to help compensate for the weaker story-lines and more detailed objectives, you will find many interesting features in Asian MMOGs, such as more sociable elements as marriage and bounty systems. Be cautious though when picking up a copy of an Asian game, as you may find more "feminine" attributes than most Western MMOGs contain. This is partly due to the increase in Asian females playing MMOGs, as well as their basic cultural qualities.

Where both worlds meet is at the intersection of graphics, the visual component of gameplay. For any game market you will find dull and boring games that have amazing graphics that run perfectly well on two year old game systems, while at the same time you will find content rich games that keep you entertained for hours on end, but provide a limited graphic experience that still seems to slow down your system no matter what components you upgrade.

This seemingly chaotic and unpredictable environment is not the fault of the games or the components in your system, but instead of the programmers, artists, and other team members that build the games. Programmers must provide the tools and abilities the designers use to place objects the artists help to create. Sometimes the art will look more realistic but the lighting, shadow effects, and shaders that programmers add into the game engine are three years out-of-date. Often times the programmers are pure geniuses in adding all sorts of features into the game engine; unfortunately the artists and designers are inexperienced and ruin any potential to exploit those features. You have these strong and weak designers in both the Asian and Western studios.


Perhaps one of the more surprising assets the Asian game industry has is its community. Westerners reading this might object to my statement because they value their seemingly rich guild societies and intensive forum posting contributions. Asians on the outside are much more introverted than westerners are, but when it comes to communicating in a virtual environment you will find that they open themselves up to each other in ways I have never seen in any western community. They stick much closer to the friends and community members they know, ultimately building stronger bonds in the process than westerners can because westerners tend to migrate from one guild to another and from one game to another.

I mentioned the difference in game design earlier and how western MMOGs tend to offer a more detailed and diverse gameplay experience. This isn’t to say that all Asian games are simple grind fests, but many tend to focus on this repetitive aspect of gameplay more than I would personally care to see in an MMOG. However, one of the reasons I think that there is more of a sense of community around these Asian games is because of this simpler gameplay style. The game forces the user to establish bonds with other users in order to make it a more fulfilling experience. While this may seem counter-intuitive to Western MMOG design theories, Asian players enjoy this simple experience and the stronger bonds they develop with their fellow players.

What are the demographics of these Asian players anyway? In walking through some of the developer’s studios in Shanghai a few weeks ago, I was pleasantly surprised to see a significant portion of the team consisting of females, whereas in the western industry you will sometimes find it difficult to find even a single female amongst a team of twenty or more developers. This also holds true to the communities that play the games, where Asian females are in a much higher percentage, and even in some cases more than fifty percent of a game’s population, than those in western markets. There is also a larger percentage of younger players in the Asian market, partly due to the markets infancy.


Game companies in Asian will tend to market the contents of a game rather than the actual gameplay itself. For example, Lineage II is often displayed with features that highlight the weapons, armor, crafting, and housing components. These are material based systems, not ones that westerners tend to focus on, such as describing the combat system, how transportation works, level and skill potential, and how magic and other effects are exciting to use. These two differences are beginning to merge together with international games like World of Warcraft.

Susan Choe and Nick Foster of “Outspark” secured $11 million in USD funding to develop MMOGs currently based in Asian find a successful place in the Western market. One of their main focuses is looking for games that everyone can play, not just the hard-core groups. They also recognize that the developers themselves must also be open to the Asian/Western relationship and the market potential. MMOGs are not static like many games, so there must remain a continual relationship between all parties for the development and localization of the games, if they are to be successful.

The most difficult challenges in creating a world market of games and establishing a firm localization foundation is understanding not just the player attitudes in various regions, but also in understanding the technological, economical, and sociological limits that those regions are constrained by. For example, China is still a developing country and most of its citizens cannot afford a pay-per-month subscription fee, or the latest computers to run games like Age of Conan, a DirectX 10 capable game.

One of the unique ways that the Asian game industry has adjusted to the limitations of system requirements is not to develop graphic intensive 3D environments, but to keep them in a 2D based environment. This keeps system requirements in check, as well as providing unique and interesting styles of gameplay that would otherwise be impractical in a 3D world. You only need to play games like Conquer Online to understand the differences, and is just one component among many that need to be adjusted if localization efforts are to be successful.


Both of these game industries have a lot to learn from each other, as they both have numerous benefits and drawbacks. Western industries could learn to better integrate their community tools and services more directly into their games, as well as exploring ways to make grinding less of a burden on the single individual by incorporating more group style solutions. Asian companies will learn that storyline and more in-depth gameplay contents for all character levels can make an intriguing and long-term gameplay experience that will keep the player interested even after they reach the maximum level for their characters.

One thing is for certain, and that is the game market is going global at an ever faster pace. We will continue to see Asian games marketed in Western countries, and Western games marketed in Asian countries (and elsewhere). This means for the foreseeable future we will need more knowledgeable industry members to understand and work with the publishers, developers, and communities to make the games as successful as games like World of Warcraft have managed to become.