An Overview of Mobile Gaming in Asia, Part 2: China

Key insights

6 slides

Market Size

China has surpassed the U.S. in smartphone and tablet installations.

As of early 2013, China became the world's largest market for smartphones and tablets. Mobile gaming revenue growth is projected to remain above 50% through 2015.

55%

Projected mobile gaming revenue growth in China for 2013.

Partnership Necessity

Successful entry into the Chinese market requires local partnerships.

These partnerships are crucial for navigating complex bureaucracy, handling cultural and linguistic localization, and managing relationships with numerous app store operators.

It's like needing a local guide to navigate a complex, unfamiliar city.

Local Alliance. Successful entry into the Chinese market is highly dependent on partnering with local firms.

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Summary

The Chinese mobile gaming market represents a high-growth opportunity for international developers, characterized by a massive and rapidly expanding install base. As of early 2013, China surpassed the United States in total smartphone and tablet installations, with projections indicating that mobile gaming revenue growth would remain above 50% through 2015. Industry estimates suggest that China could account for 32% of global online and mobile gaming revenue by 2015, with total turnover reaching $2.2 billion.

The market is defined by extreme fragmentation, both in terms of hardware and distribution. Android dominates the landscape with approximately 70% market share, further complicated by the prevalence of counterfeit devices and over 500 independent app stores. Unlike Western markets that prioritize iOS and tablet-first development, success in China requires an Android-first, smartphone-centric approach to accommodate hardware limitations and facilitate carrier billing. Content preferences also differ, with action and puzzle games currently leading in popularity over the strategy titles that often dominate Western charts.

Navigating this environment is inherently risky due to bureaucratic complexity and a lack of dominant market leaders. While major players like Tencent hold significant influence, the market remains pluralized. Consequently, the primary thesis for foreign entry emphasizes the necessity of local partnerships. Successful market penetration depends on securing local expertise for linguistic and cultural localization, navigating regulatory hurdles, and establishing direct relationships with key app store operators. Without such strategic alliances, foreign developers face significant barriers to entry and a high risk of failure.