The games industry scenario in China and the value a local publisher can provide

so today I will talk about something I hope you will be interested to you about a gaming market in China first of all a little bit introduction of myself I'm Ken I have been enjoying video games for more than 30 years and I'm now working in net yeast in China in case you haven't heard about yeast that Jesus one of the earliest internet company in China we provide lots of different Internet application service like email online music on education Parker website search engine and exception and of course including online gaming I start working he's in the on I

came in business since 2003 so I've seen a lot of changes and gave me market back then was totally different from now this is also one of the biggest game developer in China we have over 6,000 game developers and we also happens to be one of the biggest game publisher in China we not only we publish our own in-house developed game titles we are also publisher of some we're you know popular game titles like that where walk off and other prisoner entertainment spot in China and some are for one title as well okay so the introduction is done so

Sonia's publishing is the publishing arm of our game business and poach an ocean is the consumer brain for our third-party publishing business in Chinese is the meaning of a treasure boat so today I would like to talk about publishing aspect of Chinese game market so first of all I'm sure you have heard about stories in China given market a lot and sometimes the stories about a Chinese market could be confusing because almost every story of every single story about China to have two sides for example not just in on I gave me but for example China is the second

biggest economy in the world but at the same time is also a developing country so this is quite a contradiction to each other but they are both true so I will try to talk about couples of story that simulated to the Chinese game market and they just like all other story in China they all have two sides of the story and the two sides seems contrary to each other but they are true and correct so the story one we heard about this a lot there is a huge opportunity in China market according to some statistic that you can easily find on the Internet just the population wise there are over 600 millions came consumer including mobile and also PC and copy console as well so

there are over 600 billion prayers in China they would spend time or money into video game products so which is a huge number is almost a typo of the popular of the US as a country and when we talk about a mobile game they're over it was over 3.2 billion in terms of revenue of mobile game revenue in in last year which is the number one single pocket in the whole world so this side of the story is definitely very encouraging so is a huge market and a lot of opportunity for game developers or game publisher in China but the other side of the story is in last year 2018 there were over 9,000 games officially

launched in India market you it was 2017 2018 was a very particularly special years because the period session also mentioned there has been some suspension of the official government approval so supposedly we supposed to see even a higher number in in last year but per still this is the average limb but you can expect the number of new games launching in the market in a year in China which means is a hugely extremely competitive every time when you launch a new product in China you expect to compete with hundreds or even thousands of new games and you have to be very innovative and spend a lot of money in marketing in order to stand out from the competition and on the other side this

is the top grossing chart for all the new games launched in last year 2018 so you can see among the top 10 crossing mobile game launched in China last year 8 out of 10 are locally developed in mainland China action 7 but the one in numbers they are actually having the is a Japanese IP and Japanese game company but the teams who actually develop the game actually in China so it's roughly seven to eight out of the top ten most successful or most highest revenue games actually come from local so is it really a huge opportunity for Western or foreign game developer is arguable okay

story - we heard about this a lot recently since the introduction of iOS App Store opposed our sub story is a global perform once you upload your publish your app on how s app store is literally available globally including China and fans to steam which is a very popular PC distribution platform they are not officially launched in China but since they are not pained and brought by the quest firewall so a lot of Chinese game consumer they did she has the literature has no problem to install the steam and then make purchase and panel the game which is available on Steam so

we have been hearing a lot foreign game developers they might not need to look for work with a local publisher in China anymore because they can just publish the game through Steam or iOS App Store that would make them available to hundreds of millions of potential customers in China so which is in a certain extent which is a true true for side of the story let's look at steam they have already passed 30 million user in China 30 million registered akong is difficult to tell how exactly the exact you need real person but definitely is a huge number for 30 million user in one single market and for Apple AppStore China has

become the number one revenue reference generation among all different region in Apple AppStore and pop G which is a PC game available on Steam they haven't officially launched in China they have a publishing partner but because of a lot of complicated reason they have never been able to officially launch in China but they have but it didn't stop them from selling over 10 million copies first team in China which they don't have any publishing team or local operation team in in China but they have already achieved over 10 million sales in terms of unit sales in China so the other side of the story is is really no

values for local publisher in China for Western or foreign game developers this is this it also happened last year that Apple we removes over 25,000 apps on the App Store for the China region and according to their announcement why did they do that was because of a request from the government the government identified certain apps or certain definition of behavior that violate certain rules in China and then they just sent a request to Apple and then they have to compile the law and can order apps in China those apps are available all around the world except China after this Tecton which

means yes for steam for Apple iOS App Store which is a very convenient channel for foreign game developers that you can easily make your product or service available in China but after all this is not a visual channel officially approved legal channel how long will it last no one knows so if you are serious in thinking of building a long-term long lasting business brand building exception this kind of tricky or gray area channel might not be the most seasoned or appropriate way to do business in China on the other hand a local publisher in China can provide certain values or a service like marketing and promotion local payment service jalapeño which a pay and Android

channel yes for Apple iOS App Store which is a global platform including China but for enjoying Android is a whole different story because because Google Play as well as all other Google product or service are penned in China because of the quasi-war no one in China can access to any Google service directly so Google Play is not available in China and all the most of the major popular Android channel in China local Chinese company operated so they take it more seriously that from all the major angel channel in China if you do not if you cannot Hawaii a valid government approval material all the major NJ channel in

China would refuse to publish your game on their channel so working with a local publisher can provide you unleash the potential of your product or service in the NGO channel including the payment service in marketing values I just want to quote an example Hostin which is a very popular game developed by present entertainment Negus is the exclusive publisher of hustle in China in China because of a lot of considerations so we separate the app the idea is different from the global version so the Kobo version available in our market except China and then in China is a separate app only for the China market so that's why when you

try to look for the data on a penny or the sense since it how the estimate performance from those statistic website can tell you the business performance of Hassim in China is almost at the same level of customs performance in the rest of the world altogether for for example the revenue generated in last month the Chinese version the mainland Chinese was generally like four million dollar revenue in China market only which is pretty much the same level as the rest of the world altogether so with a proper publisher in mainland China we have a lot of local input and surveys brain building community

management and export or the other possible channels which could make a difference to the ultimate performance compared to just make it available on iOS or steam through this gray area channel that's another impression about the Chinese market is there only free-to-play game could work in China which is true again this is the top apps in 2018 100% 10 out of 10 actually the list would go on to top 20 or even top 30 all the top-performing app games in China for a games so the players in in China we come from a different version of the history we did not have the video game

market or industry in 80s or 90s in the country so a lot of game players in China they grow up with free-to-play game we do not have such an concept or idea that we walk into a game shop and then pay for $30 for the dollar and buy only game physically and then take it back home it just never happened in China so that's why the free-to-play game is basically the norms of many in China so it is the 100% of the story not exactly reasons in recent year we start to see more and more post model titles also doing pretty well in China as I mentioned previously pop G which is not a free-to-play game you need to pay

for like $15 before you can start playing the game but you didn't stop them from selling over 10 million copies in China overwatch overwatch which is a even more premium game W sold over 6 million in the first half year for six-month which is selling at $32 which is very close to the price level in in the rest of the world and even for a local Chinese game this one is very popular early this year around Chinese New Year they saw 600,000 unis on Steam in the first month so so it's not absolutely impossible for making a premium model game and then B is just a different type of consumption behavior and then the

next one angel for Android Market there are over 200 different enjoy channel in China and every one may require a separate SDK indication they have different payment gateway different membership system so if you want to really explore the full potential of the angel channel this is what you may need to go for or order popular and sometimes they are exclusive to each other especially for those enjoy F store operate by some manufacturer because phone manufacturer would make their phone in the way that you cannot install any other enjoy App Store on their phone which makes their App Store is the only way you have to go through in order to tap into that piece of the segment of

the user group but it becomes much easier nowadays one of the service that we provide is a recorded universal Android SDK so one single integration to the app which allowed the apps to cover 100% of the NGO channel in China one time integration and we also power lots of pretty and visibility to our developers partner so finally this is also an impression that in order to make the became work in China you need a lot of changes or modifications in the game which is true we look at a lot of successful cases in China the of legend everybody knows one is live legend the

China version looks very differently from the global version even include the art style some character design later any the art style is very different they make new ads specifically for the Chinese user and some other example that I may not have time to go into details the other side of the story is it's not necessarily true is not a requirement that you have to change a lot to your game in order to make it work in China yes they're also example like the product we work with our partners entertainment the hearthstone the overwatch and woke up they are basically the same game when you compare the Chinese version and the global version business model is the same the art is the same 99% the same except for

certain mandatory modification in order to get through the center ship but basically the user the community if if a Chinese came prayers of those games when they talked to the Pharaoh game players in u.s. in other widget they are basically talking about the same game so finally the conclusion that I want to talk about is Chinese always a very fast moving market and we are in a particular special time frame that a lot of changes is happening in last year and this year and we expect to see a lot of changes keep coming soon so what you know today may change rapidly in the next couple of months but eventually I hope if you are interested

in grab a bite in the marker or something always think long-term and most importantly work with HS Murphy partner in China thank you [Applause]