Alibaba boosts reach with deal for Travel Frog

Chinese e-commerce giant Alibaba Group Holding Ltd on Monday announced a strategic partnership with Japanese game developer Hit-Point, granting Alibaba exclusive rights to publish the free-roaming mobile game Travel Frog in the Chinese mainland.

It marks the company's latest move to charge into the gaming business to keep its growth momentum strong.

Dong Zhen, a Beijing-based independent gaming analyst, said as a late comer to the market, Alibaba would need to pour a massive amount of money and resources into gaming.

"The partnership will help Alibaba further tap into the gaming sector," Dong added. "The gaming market is gradually reaching saturation and China's demographic dividend is disappearing. Under the partnership, Alibaba will be able to further analyze the product and have a better understanding of how to make a mega hit in the market, which will fill its gap in terms of developing games."

Alibaba's founder Jack Ma previously said the company "would rather starve to death than live on games", but the situation has changed and it is now taking aim at Tencent Holdings Ltd's dominate position in the booming games market.

A report by the Game Publishers Association Publications Committee, Gamma Data Corp and the International Data Corporation shows that revenue of the gaming market grew by 23 percent year-on-year to 203.6 billion yuan ($32.4 billion) in China in 2017, with more than 60 percent contributed by Tencent and NetEase Inc.

According to Dong, currently Alibaba still lacks the ability to compete with Tencent or NetEase when it comes to online games.

"Alibaba has a large user base through its e-commerce markets Taobao and Tmall, but users don't play games on those platforms. I would suggest the company seek more opportunities via offline channels, which may challenge Tencent's dominance in the gaming industry."

During the past few months, the Japanese game Travel Frog has become a hit in China by catering to the younger generation's specific social and emotional needs.

US-based mobile analytics company App Annie reported that Travel Frog topped the list of the most downloaded apps in China in January this year. From its release in December to March this year, the game was downloaded more than 16 million times by Chinese iPhone users.

Alibaba said its game arm Alibaba Games has the ability and experience to offer high-quality products related to intellectual property rights, and it will add more entertainment elements into the game.

Under the partnership, Alifish, the licensing and entertainment unit of Alibaba, will help the Japanese brand to seek cooperation opportunities and expand the market in China.