Entering the Chinese game markets requires local connections

Chinese game markets remain a bit of a mystery for many Western game companies and developers. According to Newzoo, one of the leading game industry statistics providers, in 2020, China was the world’s biggest game market when estimated by revenue with 44 billion US dollars, followed by the United States with 42 billion dollars. For comparison, game revenues in the major European markets, Germany, UK, France, Italy, and Spain combined are about 22 billion dollars. (Newzoo 2020.) 

What makes these statistics interesting is that even though already the largest in revenue, the number of internet users is still rising. In 2020, about 989 million Chinese people had internet access. Compared to its total population, China’s internet penetration rate is still much lower than in other Asian countries, not to mention the Western world (Thomala 2021.) 

Know the landscape

To reach the ever-growing Chinese game or other software and app markets, a company needs to know how to enter these areas. According to Panu Mustonen (2021), senior business development manager at Huawei Finland, the local culture, politics, customs, and bureaucracy may be overwhelming for anyone trying to enter the Chinese markets with no connections or understanding of the Chinese way of conducting business in the digital realm.

IMAGE 1: Chinese mobile markets are dominated by Android devices and Chinese-own companies. (Feynissa 2020)

Mustonen spoke at the Accelerator Meetup online seminar, organized on May 17th by Baltic Explorers, a Central Baltic funded RDI project aiming to boost Finnish, Swedish, Latvian, and Estonian game companies in reaching Asian and North American game markets. According to Mustonen (2021), entering the Chinese market requires a lot of work and patience, but finding a local partner makes things a lot easier. It speeds up the process, possibly several months.

Mobile-oriented markets

Chinese game markets are highly mobile-oriented. Compared to the west, there are many different mobile marketplaces, some provided by mobile brands, others by third-party app stores, where a user can download an app or a game – and the vast majority of these are for Android devices. The market share of iOS phones in China is only 7,5%, making targeting iPhone’s not the number one option. (Mustonen 2021.)

Before a mobile game company gets a chance to publish a game in China, it needs an ISBN number that can be given only to a Chinese company. This means that 51% of the publishing company needs to be in Chinese ownership (Mustonen 2021). Thus, it is no surprise that the 20 most popular Android games in China are published by Chinese companies, such as Tencent and Netease (Newzoo 2021). Mustonen (2021) states that a Chinese partner should have access to multiple publishing systems, good local contacts, ability to handle required state licenses, experience in local distribution networks, and knowhow in localization, marketing, customer support, and community management.

This puts extra pressure on any game company in the Baltic region to grow its business relations skills and provide a game experience that works in a different cultural landscape if it wants to steer toward these challenging yet growing markets.

Author

Ari Hautaniemi works as an RDI Specialist at the LAB University of Applied Sciences, where he is the project manager of Baltic Explorers game industry development project, funded by the EU.

Sources

Mustonen, P. 2021. Big in China. Presentation given at Baltic Explorers Accelerator Meetup event on 17th of May 2021.[Cited 15 June 2021]. Available at: https://www.youtube.com/watch?v=18bnthBThPM 

Newzoo. 2021. Top 20 Android Games in China by MAU. [Cited 15 June 2021]. Available at: https://newzoo.com/insights/rankings/top-20-android-games-in-china-by-mau/

Newzoo. 2020. Top 10 Countries/Markets by Game Revenues. [Cited 15 June 2021]. Available at: https://newzoo.com/insights/rankings/top-10-countries-by-game-revenues/

Thomala, L.L. 2021. Number of internet users in China from December 2008 to December 2020. Statista.com. [Cited 15 June 2021]. Available at: https://www.statista.com/statistics/265140/number-of-internet-users-in-china/

Links

Baltic Explorers. 2021. About us. [Cited 17 June 2021]. Available at: https://balticexplorers.eu/

Images

IMAGE 1. Feynissa, S. 2020. TikTok_5409103_1920. Pixabay. [Cited 15 June 2021]. Available at: https://pixabay.com/images/id-5409103/

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