Saturday, April 9, 2011

China's Social Gaming Landscape: What's Coming

From: http://www.readwriteweb.com/archives/china_social_gaming_landscape_whats_coming_next.php

It's no longer a secret that China's online gaming industry is booming, and growth is set to continue with companies such as Shanda Games, Netease and The9 leading the way. In 2009, China's online gaming industry earned nearly $4 billion, growing 39.5% from 2008.

Each day, millions of high school students trying to forget the pressures of college entrance exams and young adults discontent with their jobs flock to Internet cafes to play online role-playing games. They're part of China's 384 million netizens, and they sit in front of rows of computers in dimly lighted smoke-filled rooms for upwardhttp://www.blogger.com/img/blank.gifs of eight hours at a time, living in virtual worlds to escape the pressures of contemporary Chinese life.

But beyond the Internet cafés, social games have emerged as a convenient alternative for students and workers alike to gain a sense of release and revitalize themselves before tackling the next assignment of the day in their everyday lives. They take breaks to tend to their garden on 5 Minutes' Happy Farm (Kaixin Nongchang) farming game, or steal their friend's car parking space on Kaixin001's Qiang Chewei. RenRenWang (formerly Xiaonei), Kaixin001 and Tencent's QQ Xiaoyou are leading SNS portals, and are the go-to sites to access China's most popular gaming applications.

The widespread popularity of social games is not solely limited to white collar workers in their 20s - social gaming appeals to China's youth, their middle-aged parents, and even elderly retirees looking to share a common hobby with relatives spread throughout the country. The social gaming landscape is developing at an extremely rapid pace, with competition growing increasingly fierce by the day.

What Makes a 'Winning' Social Game in China?

The most popular social games in China are simple to play and appeal to a broad audience. These winning games take place in easily recognizable environments such as kitchens, gardens and parking lots, and only require a few clicks of a mouse to have a shared social gaming experience with your friends.

Happy Farm is the most popular Chinese social game to date. Created by Shanghai-based social game developer 5 Minutes, the game is quite similar to Zynga's FarmVille. Players own a virtual farm where they plant fruits and vegetables. They purchase supplies like seeds, pesticide and fertilizer at a virtual market. While part of the game is about growing and protecting your own harvest, the real fun is sneaking into your friends' farms to steal their vegetables. The game is easy to learn, taps into traditional Chinese farming culture and is extremely addictive - appealing to the young, the old and everyone in between.

Which Social Game Developers in China You Should Know About?

5 Minutes (五分钟), CEO: Shaofei Gao

5 Minutes was founded in 2006 by three college students. In November 2008 it released Happy Farm (below) and achieved immediate success, partnering with leading SNS portals, and receiving a one-time multi-million Chinese RMB payment from Tencent for full rights to the game on its QQZone platform. At the end of 2009, 5 Minutes received $3.5 million in venture capital funding from Draper Fisher Jurvetson.

Rekoo (热酷), CEO: Yong Liu

Founded in 2008, Rekoo is one of China's leading social gaming developers with several domestic partners: RenRenWang, 51.com, Alibaba, Baidu and Sohu. Rekoo also has strategic overseas partnerships with Facebook, MIXI, Myspace and Cyworld. Rekoo's most successful games are Sunshine Ranch and Animal Paradise.

IsMole (奇矩互动), CEO: Edwin Chen

Founded in 2008, IsMole started off as a market-leading game developer for social networks, but quickly lost its competitive edge to others like 5 Minutes and Rekoo. IsMole's is best known for its Xingfu Chufang (below) cooking social game that has been released in five different languages across seven countries on thirteen different SNS platforms.

Kingnet Games (恺英网络), CEO: Yue Wang

Founded in 2008, Kingnet first released Tower of Babel in April 2009, and within three months had over 500,000 users. In July 2009 Kingnet received venture capital investment from KPCB China. In October 2009, Kingnet had over 2 million users on Facebook.

Challenges Facing Social Game Developers

Social game development in China has entered a period of tremendous growth, but it has yet to fully mature. Companies compete fiercely with varying levels of experience and capital to create the next winning game. Two major challenges have arisen as a result of this environment.

1. Lack of Innovation: There is an overall lack of diversity in gaming context. Copying is rampant amongst competitors - once a social game is proven successful, competitors begin producing their own versions. For example, there are numerous games that take place in farms such as 5 Minutes' Happy Farm: Rekoo's Sunshine Ranch, Kaixin001's Kaixin Huayuan, and Zhiming Xingtong's Happy Farmer.

2. Lack of Continuous Improvement: There is a tendency for developers to stop investing in the game after it is on the SNS platform. In some cases this is due to lack of sufficient capital, while others stop because they're trying to make multiple games to obtain a quick return on investment. This lack of continuous improvement creates short game lifecycles, as user experience ultimately suffers, and a short period of success finally leads to replacement by the next popular game.

To win in this environment over the long-term, it is unavoidable that operational costs will continue to rise, as developers must continuously improve the quality and uniqueness of their games to fend off domestic competition and maintain their market share.

This Is Only The Beginning

Despite these challenges, there is tremendous growth potential in social gaming in China. The first years of growth in China's social game development have served as a foundation. The next few years will see a convergence between social games and 3G mobile gaming. The social game user base that is predominantly comprised of students and young white-collar workers will continue to grow with even more older players joining the crowd.

While Chinese companies will continue to face a competitive market at home, the best companies will develop unique winning strategies domestically and localize them to win success overseas. In a recent interview, 5 Minute's CEO Shaofei Gao was quoted as saying: "China's netizens are becoming more mature, they are gradually becoming more accustomed to paying for gaming, and social gaming market opportunities will definitely continue to increase in the future."

Sunday, April 3, 2011

The world is changing, led by China

The world is really changing at an amazing pace, but lead not just this century by United States, but just as much by China. It was projected that China would economically pass the United States by more than double in 2050, which is some ways off, but not past many of our lifetimes. Now it's just 2020 due to the recent world economic issues, of which China has been largely immune from.

China is both geographically and demographically huge and has been growing steadily for the past several decades. Never in modern civilization's history has a developing country passed a developed country economically, but China is set for that record. It also means that China will also become not just a developed country, but the very leading country in the world in the next couple of decades.

What the world needs to realize is that China is different than the west by measures most of us don't quite grasp yet. For starters, we should understand that many developing countries are not necessarily going to westernize upon becoming developed. We have this mentality that "civilization" equals fast cars and huge homes. This is not entirely going to be the case for China. It will remain in fundamental respects, very different than any country outside the Asian sphere of cultural influence.

It's probably a good idea to understand what China really is then, how it arrived at its current existence, and also how it's going to change itself and the world in the decades to come. First, we assume that China is nation state, much like the United States with it's 50 states. This is a misconception. China is a "civilization state", a term coined by Martin Jacques, which comes from the binding of the Chinese behind the Han dynasty and the absolutism of the family.

Chinese care more for the whole than for the person. This is what has kept China, a huge country the size of the United States, together for over two thousand years... the absolute authority of the family and belief that all Chinese are of one race. The head of the family itself is not the parents of a child, nor of the grandparents, but the government. You can maybe see why Chinese have an absolutist approach toward Tibetans and Taiwan for instance.

China is also a single country with two systems. I emphasize the point by focusing on Hong Kong, handed over to the Chinese in 1997. A decade before that, no one believed that it a handover of such magnitude was possible. How did the world miscalculate such a significant transition? It's because China operates on the one nation, one system mentality. Hong Kong is by default a part of China, and in the near future, Taiwan will be the same, at least if they have their way.

Why is China so much different in respect to the government than the west, primarily the United States? It partly has to do with isolation. The United States was founded on refugees escaping from a religiously fanatical Europe of the time, persecuting anyone who thought differently or was different than the mainstream. Struggling to survive, skepticism and defense of ones person trumped the respect and integrity that a government, at its best, can provide.

China is different. They don't see the state like that at all. They view the state as I mentioned earlier, as a major member of the family. This has largely what's helped to keep China together, and what will keep it together for the next several decades. This is both something perhaps that the west doesn't entirely understand and will soon see in emphasis as China becomes the new super power of the world, near 2020.

This view of China can sound scary to many. It's a view that China is somehow a selfish and even immoral being because it prides and respects itself not on the person, but on the whole. I've been to China, taught in a Chinese school for a year, so I have a unique perspective than most might have to what they here on CNN or search through Google.

The world is really changing at an amazing pace, but lead not just this century by United States, but just as much by China. It was projected that China would economically pass the United States by more than double in 2050, which is some ways off, but not past many of our lifetimes. Now it's just 2020 due to the recent world economic issues, of which China has been largely immune from.

China is both geographically and demographically huge and has been growing steadily for the past several decades. Never in modern civilization's history has a developing country passed a developed country economically, but China is set for that record. It also means that China will also become not just a developed country, but the very leading country in the world in the next couple of decades.

What the world needs to realize is that China is different than the west by measures most of us don't quite grasp yet. For starters, we should understand that many developing countries are not necessarily going to westernize upon becoming developed. We have this mentality that "civilization" equals fast cars and huge homes. This is not entirely going to be the case for China. It will remain in fundamental respects, very different than any country outside the Asian sphere of cultural influence.

It's probably a good idea to understand what China really is then, how it arrived at its current existence, and also how it's going to change itself and the world in the decades to come. First, we assume that China is nation state, much like the United States with it's 50 states. This is a misconception. China is a "civilization state", which comes from the binding of the Chinese behind the Han dynasty and the absolutism of the family.

Chinese care more for the whole than for the person. This is what has kept China, a huge country the size of the United States, together for over two thousand years... the absolute authority of the family and belief that all Chinese are of one race. The head of the family itself is not the parents of a child, nor of the grandparents, but the government. You can maybe see why Chinese have an absolutist approach toward Tibetans and Taiwan for instance.

China is also a single country with two systems. I emphasize the point by focusing on Hong Kong, handed over to the Chinese in 1997. A decade before that, no one believed that it a handover of such magnitude was possible. How did the world miscalculate such a significant transition? It's because China operates on the one nation, one system mentality. Hong Kong is by default a part of China, and in the near future, Taiwan will be the same, at least if they have their way.

Why is China so much different in respect to the government than the west, primarily the United States? It partly has to do with isolation. The United States was founded on refugees escaping from a religiously fanatical Europe of the time, persecuting anyone who thought differently or was different than the mainstream. Struggling to survive, skepticism and defense of ones person trumped the respect and integrity that a government, at its best, can provide.

China is different. They don't see the state like that at all. They view the state as I mentioned earlier, as a major member of the family. This has largely what's helped to keep China together, and what will keep it together for the next several decades. This is both something perhaps that the west doesn't entirely understand and will soon see in emphasis as China becomes the new super power of the world, near 2020.

This view of China can sound scary to many. It's a view that China is somehow a selfish and even immoral being because it prides and respects itself not on the person, but on the whole. I've been to China, taught in a Chinese school for a year, so I have a unique perspective than most might have to what they here on CNN or search through Google.

While there are rightful concerns, I honestly feel that our planet and civilization will require a country like China to prosper through the technological 21st century. China isn't entirely the monster many see from a new power. In fact, te need of a country like China doesn't necessarily spell doom for our way of life, but all around benefits. And as powerful as China is set to become, and is already, they are not without problems either. Far from it.

"India and China are entering the world's economic market. It's the most significant event to hit our economy in decades if not centuries. Think of it--half the population of the world, suddenly wanting to buy." - Cliff Brewis

"India and China are entering the world's economic market. It's the most significant event to hit our economy in decades if not centuries. Think of it--half the population of the world, suddenly wanting to buy." - Cliff Brewis