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China Mobile Game Market

China Mobile Game Market

OVERVIEW

China (officially the People’s Republic of China) is a country in East Asia. It has the largest population of any country in the world.

In 2019, China’s population rose to 7,230,686 people and, based on the latest data published by the United Nations Population Department, is projected to grow to 1,408,526,449 people by the end of the year. The natural population will see a positive growth of 7,609,036 people. Over the entire year, roughly 17,404,093 babies will be born and 9,795,057 people will die. If external migration remains at the same level of the previous year, then the population will change by –378,350 people as a consequence of migration reasons. In other words, the total number of people leaving the country (emigrants) will exceed the number of people entering the country for long-term stays (immigrants).

China is a great power. It’s a potential superpower, an economic giant, and permanent member of the United Nations Security Council. China has a leading space program, a nuclear arsenal, and the world’s largest army by number of service members.

In 2010, the Chinese economy overtook the Japanese economy, becoming the world’s second by nominal GDP. It has been the world’s first economy by GDP (PPP) since December 2014. According to data from Statista, this figure grew 8% from 2018 to 2019 and continues to increase (see the dynamics in the table below). China is the world leader in the manufacture of most types of industrial products, including cars and the demand for them. It is the largest global exporter and is called “the world’s factory”. It has the world’s largest reserves of foreign exchange and gold.

China has a long and age-old history, as well as one of the most ancient and complex writing systems. Until the 19th century, it had been one of the most advanced governments in the world and the main cultural center of East Asian. Chinese influence in neighboring countries remains significant to this day. China is the birthplace of many discoveries that have changed the fate of humankind. Among them, there are four great inventions: the compass, gunpowder, papermaking, and printing.

Like most Europeans, we owe our knowledge of China (and that of the Han) to Marco Polo’s “Description of the World”. The Chinese have not forgotten Polo’s role, naming a bridge in Beijing after him. Marco Polo also somewhat inspired the Assassin’s Creed series from Ubisoft, but that is another story.

According to Eurostat, mobile Internet in China is expensive ($1.13 per 1 MB, with the average salary being $886), so the majority of people use Wi-Fi to connect to the Internet. This is worth remembering when you’re developing an application that requires an Internet connection.

Many people use phones to make payments, practically not using cash at all. About 31.2% of population pays with smartphones at least occasionally. On average, one user of WeChat—the most popular messenger in the country—makes 55 transactions a month.

The most popular mobile payment system in China is Alipay, and the second most popular is WeChat Pay.

MOBILE GAMES MARKET IN CHINA

In 2016, the Chinese games market overtook the US market and became the largest in the world (for games on mobile platforms).

The majority of users prefer to play on their mobile phones, the second most popular platform is PC, and the third is tablet.

Statista reports that revenue from mobile games in China in 2018 amounted to $21.7 billion, demonstrating a growth of $1.6 billion for the year, which makes up 7.37% of China’s market volume in 2017. Although this percentage is higher in Europe, the absolute numbers in US dollars are higher in the Celestial Empire due to its larger market.

The graphics below show Statista’s growth forecasts for the Chinese games market for March of 2019.

The main feature of the Chinese mobile games market is that nobody knows its real size. More precisely, the size of the iOS games market can be determined, but nobody knows how big the games market for the Android platform is. The reason for this is the large number of stores for Android apps. Experts predict that the Chinese will spend $17,980 billion on mobile games in 2019. By 2022, that number will reach $22,517 billion. Over this period, the number of users will increase from 422.2 million to 498.5 million. On average, users will spend $40.71 on games in 2019 and $45.17 in 2022.

China will retain its statues as the largest gaming market in the world over the long term.

According to Statista, the average ARPU for 2018 was $31. The average CPI was $1.02, which is $0.43 more than in 2017.

The games development market in China began its growth with large MMORPGs, and it is in no small part thanks to Chinese players that the free-to-play model gained such broad popularity in this genre, and then successfully spread to the mobile market.

One interesting fact is that the sale of Xbox and PlayStation in China has been permitted since just 2015.

In most countries, apps are usually installed through the App Store and Google Play, while there are over 300 application stores in China.

The Chinese authorities require applications to be registered. To do this, the developer must register as a juridical person, complete the necessary documents, install the app on a mobile telephone, and sent it to government officials. Three authorities are responsible for game publication. They are the Ministry of Culture, the CAC (Cyberspace Administration of China), and the SAPPRFT (State Administration of Press, Publication, Radio, Film & Television). After checking for illegal content (which can include pornographic materials or calls to break the law), the application is given a number the developer can use to register it in stores. Representatives of the development company do not have to do this personally. It is usually enough to find a representative in China.

These rules are in effect for Android games. Apple representatives managed to make an agreement with the Chinese government.

On April 10, 2019, the Chinese National Radio and Television Administration released a statement on how the game certification system will work. Here are the highlights:

  • The online-game ethics committee checks that projects adhere to national values.
  • The number of licenses issued per year is limited. Experts from Nico Partners estimate that around 5,000 projects will be approved in 2019. However, various mahjong and poker simulators will not be allowed to enter the PRC market.
  • The Chinese government is starting to tackle its citizens’ addiction to gaming. Publishers will be required to add systems that limit the time spent in the game to their projects.
  • Games must be historically accurate and promote Chinese culture.
  • Changes in the certification rules will affect all games, including those based on HTML5. This means that the committee must approve even those games embedded in social networks and instant messengers.
  • When a registering project is part of a franchise, developers must specify this, otherwise government officials will consider it to have the same name as the existing game. Version numbers cannot be included in the title.
  • There are allowances, as well. Publishers no longer need to send the committee mobile devices with pre-installed games or a printed list of forbidden words. Digital copies will now suffice.

The highest grossing games from foreign developers as of June 2019 are Hearthstone (Blizzard Entertainment, USA); Summoners’ War: Sky Arena (Com2uS, South Korea); Gardenscapes, Homescapes, and Township (Playrix, Ireland/Russia); Clash of Clans and Clash Royale (Supercell, Finland); Lords Mobile (IGG); Merge Dragons (Gram Games ); Marvel: Contest of Champions and War Robots (Pixonic, Russia).

In contrast to the rest of the world, China has many of its own Android application stores, the total number of which exceeds 100.

According to experts, the top 10 Chinese stores are:

Specific platforms place different demands on developers. For example, Tencent Appstore requires developers to provide a scan of their license, a copy of the ICP license, and a link to the website to publish a game. Qihoo 360 takes it even further. You have to present a Chinese ID (a foreign passport will not work), a bank account number, a mobile verification number, as well as ICP and developer’s licenses. You may need other licenses, depending on the type of application (all mobile games require a license for working with cyberculture and permission from the National Radio and Television Administration for streaming). Things are simpler in the Baidu App Store—all it asks from developers is the ICP and the company’s business registration.

ICP licenses (abbreviated from Internet Content Provider) are issued by the Ministry of Industry and Information Technology and required for all companies that provide information services over the Internet. To obtain a license that allows you to conduct business and earn an income, you’ll have to pay $5,000 in fees. In addition to keeping your app from being blocked, a license will help you speed up the verification process and protect you from intellectual property theft.

It is usually recommended to release Android applications on the Chinese market through a publisher, or you will have to negotiate independently with the 10–20 most popular stores. Otherwise, after your application is published in one store, it will immediately appear in the others, but without in-app purchases.

The most popular mobile operating system in China is Android (72.07% of users), with iOS coming in second (26.96%).

Among search engines, Baidu lead by a large margin (84.32% of the market), with Shenma in second place and Sogou in third. The global giant Google has only 0.59% market share for search queries in the country.

The most popular manufacturer of mobile devices is Apple (22.83%), with Huawei and Oppo in second (19.05%) and third (11.09%) places, respectively.

The most popular social networks in China are WeChat, QQ, and Sina Weibo. Users visit social networks to see what’s new with their friends, share information, or update their status. About 26.3% of QQ users and 22.6% of Sina Weibo users play online games through the application.

WHO PLAYS MOBILE GAMES IN CHINA?

Lately, it has been difficult to track Chinese preferences in game genres. The highest grossing genres include MMORPGs, racing simulators, and quest games. As is characteristic, all the games in the top 10 were released by Chinese developers.

It can be said that, from a gameplay point of view, the Chinese do not feel the drive to prove their superiority in games that is so prevalent among western gamers. This means Chinese mobile gamers do not enjoy challenges but prefer something more relaxing instead, and they have a particular weakness for casual games and RPGs.

Unlike western gamers, the Chinese like cartoonish graphics featuring bobblehead characters instead of realistic graphics.

The Chinese do not respond well to in-game promotions, although they do like to show off their status (e.g. that they are VIP users) and boast about being able to afford dropping $10,000 on game purchases for all other players to see.

Statista’s data for March 2019 shows that the total number of mobile games players in China was about 563.2 million people in 2018. This figure is predicted to grow to around 582.6 million people by the end of 2019.

Most gamers are 25–34 years old.

Among mobile games players, 55.4% are men and 46.6% are women. In other words, we are seeing a trend of increasingly more women playing games.

CHINESE MOBILE GAMES DEVELOPERS

Not so long ago (in 2012), the most profitable mobile games in Chinese app stores were western games. Now the situation has reversed. Almost all successful games on the Chinese market were developed by local developers. This is due to the country’s policy of supporting local business, making it extremely difficult to release a foreign game on the market without a local publisher.

Among the hundreds of developers of the most profitable games on the Chinese mobile market are such leading global companies as Blizzard Entertainment, Supercell, Gameloft, and EA (directly or through a local publisher). It is particularly worth noting the success of a developer from Vologda, Playrix. In spite of all the recommendations on the need for finding a local publisher, they managed to release on the Chinese market independently and have achieved success (the leaderboards for the highest grossing projects include three games from Playrix).

According to data from App Annie, the most downloaded games for iOS as of June 2019 were:

The top games for Android as of March 2019, according to Statista, were:

As of now, the largest games company in the world by revenue is the Chinese company Tencent.

China has around 250 mobile games publishers, 50 of which are major companies.

Here is a list of the 10 largest publishers and mobile games developers for the Chinese market by revenue (according to App Annie):

  1. Tencent
  2. NetEase
  3. Baidu
  4. OneSmile
  5. Alibaba Group
  6. Youzu
  7. Happy Elements
  8. bilibili
  9. 37 games
  10. IGG

LOCALIZATION INTO CHINESE

Chinese is a language or a branch of the Sino-Tibetan language family, which are made up of variations that are mutually comprehensible to varying degrees. Chinese is the most common modern language. The total number of Chinese speakers exceeds 1.3 billion people, with 982 million native speakers (as of 2016). There are currently two types of Chinese character systems: simplified and traditional.

When localizing text for mobile applications, the simplified writing system is used for mainland China and Singapore, and the traditional system is used for Hong Kong and Taiwan. There are also lexical distinctions that must be considered. In particular, different gaming terms might be used for various countries and areas.

When recording voice-over, it is important to consider that Chinese has 10 dialect groups: the northern supergroup (北—Beijing), the Jin, Hui, and Wu groups (吴), Xiang (湘), Gan (赣), Hakka (客家), Yue (粤), Pinghua and the Min supergroup (闽). For the countries listed in our report, the northern supergroup may be used as a guide for China (as it is the most widely spoken—over 800 million people), Yue may be used for Hong Kong (and Macau, not included in the report), and regional specific features should be taken into account for Taiwan (partially acknowledged as the Republic of China) and Singapore.

The table below shows the writing and dialects of the Chinese used in each region.

Particular attention should be given to in-game text that is not translated into Chinese. There is some evidence that the recently enacted laws prohibit the use of English and other languages (this is not quite accurate, but it is how the law has been interpreted) and a violation may result in an app being banned in China.

Chinese, like English, is a rather compact language. Chinese words have even fewer symbols than English words have letters. They are more intricate, however. Therefore the font should be larger. This requires more space between lines than in English versions. Even with larger fonts, texts in Chinese are slightly shorter in the horizontal orientation than they are in English.

The main issue with Chinese localization is the fonts. Chinese has about 80,000 characters. A person of average literacy can recognize 5,000 to 6,000 characters. Although, knowing 2,000 symbols is enough to understand the majority of texts. Games that use bitmap fonts can lead to insufficient memory. This problem is usually solved as follows: the translated text is scanned and all the unique Chinese symbols are output into a large bitmap. This is then used as a reference to the font. In this way, memory is only expended on the symbols that are actually used. But this option won’t work for dynamic texts (for example, names that gamers enter), because the gamer may use symbols that aren’t in the bitmap. Another localization approach is using the operating system’s fonts, if they’re available.

Here’s what our investigation has shown about the peculiarities of localization:

  • Around 27% of Chinese gamers stop playing a game if they notice a punctuation or grammatical error.
  • Players are willing to pay more for high-quality localization.
  • Chinese gamers want to provide feedback about localization errors but don’t know how.
  • Players don’t like the use of swear words.

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