SCMP: Chinese developers are making mobile games based on well-known franchises in order to "capture" the global market
China’s gaming market has overflowed with mobile developers, SCMP believes. Competition in the country has intensified, and Chinese companies have increasingly begun to look towards the West. Titles based on famous franchises like “Harry Potter”, “The Lord of the Rings” and “Game of Thrones” help to achieve popularity among European players.
General situation:
- The Chinese gaming industry is actively developing. Almost half of the country (665 million people) regularly plays video games. Last year, local gamers spent about $43 billion on games;
- most of the money revolves around the mobile segment. According to CADPA (Chinese Association of Audio, Video and Digital Publishers), three quarters of the country’s gaming revenue comes from mobile;
- all this leads to the fact that developers are becoming cramped in the country. Therefore, the key trend of the Chinese gaming industry has become Chuhai (Chuhai) or otherwise — the search for sales markets abroad;
- According to CADPA, in 2020, the export of Chinese games increased by 33% and reached $15.4 billion. At the same time, 60% of the revenue came from the USA, Japan and South Korea;
Franchise Games:
- launching branded mobile games is one of the ways to strengthen its position in the global market;
- details of transactions with owners of well-known franchises are usually not disclosed. But on average, a Chinese studio can count on 50% of the title’s earnings;
- For example, NetEase, China’s second largest gaming company, is listed among the followers of this strategy. Last year, the corporation signed a deal with Warner Bros. Interactive Entertainment. It allowed developers to engage in such mobile games as The Lord of the Rings: Rise to War and Harry Potter: Magic Awakened;
- another large company working with branded projects is Tencent. The industrial giant is also known for mobile versions of console and PC titles. He has worked with the franchises: Pokémon, Call of Duty and Player Unknown’s Battlegrounds (PUBG). According to Tencent’s own estimates, 23% of gaming revenue in the fourth quarter of 2019 came to it from abroad;
- the strategy of launching games for global franchises is used not only by large corporations, but also by relatively small studios. Among them is Yoozoo, which is behind the browser and mobile Game of Thrones: Winter is Coming;
Problems and risks
- Recently, Western companies have begun to strengthen control over Chinese applications. This is especially acute in India and the USA. Recall that 59 mobile games were permanently blocked in India recently, and TikTok and WeChat are being discussed in the States;
- In addition, according to Bloomberg, Western gaming companies themselves have become interested in developing mobile games based on franchises. Previously, they lacked experience in mobile, and therefore studios preferred to outsource such development to Chinese companies. But now the Europeans have increased their own resources;
- nevertheless, the investment firm Gossamer Consulting Group claims that Western developers are still not ready to completely abandon the services of Chinese studios. For example, for the whole of last year, Ubisoft earned only $233.7 million in mobile. At the same time, the monthly revenue of one PUBG Mobile from Tencent in the second half of 2020 was much more (and in a year the game collected $ 2.6 billion at all);
- another challenge is the spread of cloud streaming. Technologies that allow you to run games simultaneously on PCs, consoles and smartphones may begin to seriously compete with the practice of transferring franchises to mobile devices.
