Mobile gaming the economy has been in a state of flux for the past couple of years, and it has become quite difficult to predict what will come next. China has had its own unique set of issues, mostly due to the nation’s desire to take control of the market and provide more security and privacy to all parties.
Despite this, China’s mobile economy has continued to thrive over the past 18 months. The past year has been significant for the Chinese mobile scene as mobile app publishers have found new audiences and explored new mobile advertising channels, many of which are here to stay – 681.7 million mobile gamers have been reported in China in 2020. To add to this, the country also leads the gross revenue, accounting for over 35% of mobile gaming revenue globally in 2020.
Western publishers have taken note, but recent regulatory crackdowns have given some pause. What can be done to allay some of these concerns and help open up the market to global game publishers?
The biggest Chinese developers are going global
It can be argued that Chinese tech giants like Tencent and Netease actually saw these restrictions as a contingency and acted accordingly by investing and acquiring global studios. Tencent alone has invested in over 30 game companies, including Roblox, Supercell, Riot, and Voodoo.
Chinese publishers who used a global strategy increased their revenue by 36.7% in 2020 and recorded more revenue in international markets than in China. Part of this is fueled by the fact that publishers are moving away from ISBN-restricted games with in-app purchases (IAP) towards fan-friendly free (F2P) games with well-executed ad monetization models.
Since mobile gaming giants such as Zynga and Scopely hold a winning formula for IP gaming as well as vast resources, there is an opening in the market for cross-platform growth. To be clear, this is an ambitious goal, but one that could be seen as a necessity to support user and revenue growth.
What Western Publishers Are Learning from China
Publishers keen to go east are seeing the success of Chinese studios capitalizing on intellectual property (IP) such as Journey to the West in their home markets. Zynga has taken note and made wise investments in the market with Harry Potter IP titles and an upcoming Star Wars mobile game.
Kabam’s Marvel IP was also successful, with its F2P Contest of Champions game topping the US charts for licensed mobile action games. Kabam subsequently partnered with Netease and localized the game for the Chinese market.