Economy

Markets

Industries

Insights

Reports

Events

China gets its game on

(China Daily)
Updated: 2008-05-05 13:44

China's online game market has long been dominated by foreign game companies whose games have fascinated millions of Chinese users who find great pleasure in fighting with wizards and skeleton armies in foreign virtual worlds.

Related readings: Online games more popular than ever China's Internet market to hit 164b yuan in 2008 Online gamers to reach 59m in 2008 Online game market hit $1.8b in 2007 China's online economy to double in 3-4 years More Chinese children exposed to online danger

However, the trend has reversed as more domestic online game companies are developing games with Chinese themes and using Chinese marketing tactics to sell them.

According to the General Administration of Press and Publication (GAPP), the turnover of China's online game market reached 1.32 billion yuan in 2003, with domestic games accounting for 25.7 percent. Last year, the domestic percentage increased to 65.1 percent, boosting the market turnover to 6.88 billion yuan.

The rapid growth allowed 11 Chinese online game companies to be listed on foreign stock exchanges during the past three years and gave them more resources to develop their games.

"The cost of online game development in China is less than one tenth than that in the foreign countries," says Chi Yufeng, founder, chairman and chief executive officer of Perfect World, a Chinese online game company that launched its IPO on NASDAQ last year.

"This advantage will continue for the next ten years, which makes it a great opportunity for Chinese online game companies," Chi says.

The companies have put great effort into developing Chinese-themed games and using localized marketing tactics.

Sohu.com's popular online game Tian Long Ba Bu, for example, is based on a popular historical martial arts novel and its peak concurrent user number has reached 600,000 since its initial launch at the end of last year.

Perfect World's popular ZhuXian, which quickly became one of the most popular games in China since its official launch last year, also derives from a traditional Chinese fairy tale and contains many Chinese elements such as traditional Chinese arts, philosophy and history.

"Most of the foreign games were based on western culture, with which the Chinese game users are not quite familiar," says Liu Bin, analyst from BDA China. He says as Chinese game companies put more marketing resources into Chinese Internet cafs, the major location where Chinese people play online games, they accumulate a huge number of users more quickly.

However, among the foreign games, World of Warcraft (WoW) seems to be the exception. The game has been one of the most popular games in China since its introduction in 2005 and the number of its peak current users reached a high of one million this year, according to the company's Chinese operator The9 Inc.

Since 2005, The9 has launched the "hardware-upgrading" progamme to fund Chinese Internet cafs owners upgrading their computers to better support the game. It has also built up a product localization team to make WoW friendlier to Chinese players and meet regulators' requirements. In addition, it established a 200-strong sales and marketing team and set up sales terminals in over 10,000 Internet cafs, making it the most successful foreign games in China.

"I think The9 did a great job," says Liu, noting its unique localization efforts contributed a lot to WoW's success in China.

According to Liu, foreign games face a lot of problems in China such as a slower response to the local needs, a fiercer regulatory environment and the cultural gaps. But he says as foreign game companies still have advantages in development capability, they could regain their success in China if they are more willing to listen to their Chinese partners.

"The success of the online games in the future will rely heavily on the social networking among gamers," Liu says. "That will make foreign game companies have to become more reliant on their Chinese partners and give them more power if they want to make a success here."