Chinese outfit Shinezone Network takes unusual route to success

Jointly established by Sina.com Technology (China) Co Ltd and the Li Hualiang family in 2011, Shinezone Network Co Ltd is a company that has from the get-go been focused on the overseas gaming industry instead of the domestic market.

The Shanghai-based company, which specializes in browser and mobile games, has since its inception distributed more than 30 games in 20 countries in Europe, North America and Southeast Asia. It presently has more than 200 million overseas players.

Some of its well-known titles include Flower Shop, The King of Towers and Infinite Heart. Shinezone Network also counts Facebook, App Store and Google Play among its long-term strategic partners.

An experienced gamer himself, Li Hualiang, currently the company's founder and chief executive officer, used to work as an overseas Internet commercial agent.

He started to study the possibility of forging a career in the game industry in 2008 and decided he would set up a company that catered to the Western market instead of the local one as he believed the former had a healthier ecology that was inclusive toward startups.

"In the highly competitive Chinese domestic market, the industry chain has been divided into many small parts. Users and content are separated. But in the overseas market, the chain is still open and connected," he said in an exclusive interview with China Daily USA.

The gaming habits of overseas users have also helped Shinezone Network to maintain a healthier growth pace, added Li.

He explained that while most Chinese users are willing to splash large amounts of money to buy in-game items so as to progress quickly and appear on the top of the leaderboards in a short period of time, foreign players tend to shy away from big purchases and prefer to play a game over a longer duration of between two to three years. This in turn allows revenue to stream in at a steady pace.

But catering to foreign gaming tastes was nevertheless a stern challenge because of differences in culture and aesthetic preferences.

For instance, Shinezone Network had initially designed games that featured strong Chinese elements such as martial arts but none of these titles were well-received because the target audience simply could not relate to the content.

"We tried to introduce games with a strong Chinese cultural background to overseas players but none of them succeeded. Westerners just found it hard to understand the game," he said.

"If there is a game featuring a Chinese setting and another with a Western setting, overseas players will definitely choose the latter," he added.

The company also found that Western consumers prefer simulation games such as those that allow players to run a farm or a restaurant. As such, most of the games produced by his company are from this genre.

The biggest obstacle, however, was the lack of knowledge of the local market. To solve this problem, Shinezone Network built up a big data analytical system to gain a better understanding of consumer preferences.

In order to create a product that foreign consumers would like, Shinezone Network also focused on its localization efforts, making it a point to use staff native to a country to produce relevant content.

Despite the challenges, the company managed to hit the ground running, becoming profitable within just a year.

Li said that Shinezone Network is planning to complete two acquisitions in the North American market in the second half of this year.

Shinezone Network had also secured 400 million yuan ($58.54 million) from its Series B financing round in February. Investors include China Fortune Securities, Shanshan Venture Capital, Bank of Ningbo, Jiuyou Fund and Nord Engine Capital.

The company also announced that same month that it had started preparations for going public in the domestic market. But the company didn't disclose the exact timetable.

"The Chinese market is so big that we cannot afford to lose. Many overseas players are fighting their way in. We are based here in Shanghai, how can we just run away?" laughed Li, when asked about the decision to go public in China.