China's mobile gaming market to top US and be No 1

The mobile games market in China is expected to generate more than $3 billion in 2014, according to new estimates from SuperData Research, and that could mean China is set to replace the US as the No 1 market in the sector.

Joost Van Dreunen, CEO of SuperData, said it's no surprise that China and the US are the two biggest players in the mobile games market.

"What is surprising is the rate at which China has caught up with especially large Western mobile game markets," Dreunen said. "This is exciting for publishers because its growth is reminiscent of that of the US a few years ago, but it has a much larger potential audience."

SuperData released its May 2014 Mobile Games Brief for the US and China earlier this month, which predicts the worldwide global games market will exceed $20 billion by year's end.

SuperData's estimates for the US and China came in at $3.2 billion and $3 billion, respectively, but the rankings could change due to trends at play in the world's two largest economies.

"Mobile games [in China] are showing tremendous growth," said a May 5 post on SuperData's blog. "By comparison, the US mobile game market is showing signs of saturation. Overall spending continues to grow but does so at a lower rate than its Chinese counterpart."

Dreunen said the gaming industry in the US is "experiencing a transition" from a retail-based game market to a digitally focused environment, and a key component of building a "successful global business" in the gaming market is making sure the products fit the needs of consumers.

"Publishers must tailor their games to suit local markets," he said. "This process of localization has become increasingly important in the games industry, and directly affects a game's ability to persuade players to spend money. What works well in the US may not work well in China, and vice versa."

Founded in 2009, SuperData is a leading provider of market research and intelligence on free-to-play and digital games. By collaborating with publishers and game developers, SuperData analyzes market changes, establishes revenue estimates and identifies key developments for popular online games.

Asian games research firm Niko Partners recently released a report estimating that the Chinese PC online gaming market would double by 2018.

"Investors are embracing the mobile games space in China but there is still a lot of life left in PC online games, and now the exciting market of consoles too," said Lisa Cosmas Hanson, managing partner at Niko.

On April 29 in Shanghai, Microsoft announced plans to roll out its Xbox One flagship gaming consoles in China later this year. The Chinese government banned video game consoles in 2000, but lifted the ban last January.

Dreunen said the launch of Microsoft's Xbox One in China would have to compete with the existing standard bearer - PC/mobile gaming.

"With the exception of Japan, most Asian markets do not have a significant physical retail game market," said Dreunen.

"Furthermore, the free-to-play monetization model originates in Asia, which means that Chinese gamers are more accustomed to it. There does exist an affluent top layer in Chinese society that, no doubt, will want to have access to console gaming."

"However, the incumbent model of PC/mobile gaming in China, and the existence of a large installed base of pirated consoles, tells us that it will take some time," he said.

The video game industry in China generated a revenue of $13 billion last year, a 38-percent jump year-on-year, according to a January report from BBC News.

jackfreifelder@chinadailyusa.com