Is China Attractive to Western Mobile Developers?

Western mobile developers weighing entry into China face a tension between a vast market opportunity and substantial structural barriers. Written in August 2015, the analysis questions whether China remains "too big to ignore" given slowing smartphone growth and notorious difficulty of market penetration by foreign technology firms.

The case for China rests on scale: roughly 30% of global smartphone sales, a projected 900 million-plus smartphone users by the end of 2015, and an estimated $6.5 billion in mobile gaming revenue for the year. However, Gartner's second-quarter 2015 data indicates the market has reached saturation, now driven largely by replacement purchases rather than first-time buyers, with premium device appeal becoming key for vendors. Apple's global quarterly share rose 2.4% while Android sales fell 1.6%.

The obstacles are considerable. Groupon's Chinese joint venture collapsed, Google operates neither search nor the Google Play store in the mainland (though a return was rumored), Facebook is blocked, and Tencent blocked Uber on WeChat while backing a domestic rival. Operational hurdles include severe app store and hardware fragmentation, low credit card penetration (offset somewhat by booming mobile payments), and regulatory complexity that effectively requires a local partner.

Large publishers have pursued localized launches through partners, as with King and Tencent or Supercell and Kunlun, but this approach is likely impractical for smaller studios, and even major developers express mixed views on China's potential. iOS holds around one-fifth of the Chinese smartphone market and benefits from iPhone status appeal, yet combined third-party Android stores dwarf iOS in downloads and revenue. The author concludes that the right answer depends on organizational focus: whether to commit resources to globally expanding a single breakout title across BRIC markets, or to build a portfolio of titles in a limited geography and lower user acquisition costs through cross-promotion.