Key take-aways
China is big on gaming. Half the population is estimated to be active gamers and the audience keeps growing.
China made revenue of US$45 billion in 2022 making it the highest revenue-making market in the world.
Despite how attractive the market looks it is also the hardest one to crack. The government has strict rules for foreign developers, there is a lot of competition and technical disadvantages that could hold you back.
However, it is possible to make it in the market if you pay your cards right. Finding a local partner to do business with, is number 1.
Find payment servers approved by the Chinese government or register with WFOE to make operations and transactions easier.
Localize the content and marketing so the Chinese audience understands and relates with your games.
Regularly review your compliance policy with the help of your partner to ensure you are adhering to the guidelines and don’t risk trouble.
With the help of an agency or a local partner, the toughest market in the world can be your ground to build a successful gaming business.
China is big on gaming. It remains the world's largest e-sports market and currently has 744.1 million active gamers. During the Chinese New Year, MarketMeChina reported that the popular game Honor of Kings had 60 million streams on its streaming platform Douyu - double the previous year.
The Chinese market is no doubt a very attractive market for game developers. If you take a look at the figures from the past year, you will notice that China is one of the most rapidly growing markets for game development. They made US$45.8 billion becoming the highest-paying market in the world, followed by the US.
For foreign game developers, the Chinese market is also the most challenging one- but with the right framework, it is not impossible to penetrate. The stringent guidelines, complex market data, high competition and the disadvantages of a remote work setting could hinder your success in the game market. So we’ve summarized a few guidelines to help you build a successful market strategy.
Why China?
The recent effects of the pandemic gave a push to the already thriving game industry in China. With the increase in the number of gamers, currently, half of China’s population is estimated to be actively gaming. Having half of one of the world’s highest populations as your audience, means there are a lot of opportunities for you to explore.
China is a thriving gaming market and is partially responsible for the country’s sustainable economy. Despite the gaming crackdown, The Chinese gaming economy remained stable showing just how strong it is. The development of the market has been an interesting one to observe in comparison with the US/ Europe market.
The Chinese gaming market is projected to be worth US$105.90bn in 2023. More game developers are now entering the market which is brewing opportunities for both them and tech companies, considering you play your cards right. The market is showing a lot of potential and as a foreigner, if you are looking to penetrate the market and establish a successful gaming business, then read on.
In the Chinese market, smartphones are the most popular mode of gaming and the convenience of gaming anywhere, at any time, increases the likelihood of making a prominent entry into the market. After mobile games, there are PC games that take up the second highest number of users while browser games are the least used mode of gaming.
The challenges you face as a foreign game developer in China
The Chinese game market is heavily aligned with its strict government policies. The Chinese government uses the guidelines to keep safe the public image of the governing body safe and will hence have many regulations to comply with. After going through extreme reforming in 2018, it became necessary for all of your games’ content, structure and operation to be approved by a regulator and be given a license accordingly.
A growing market also means heavy competition. There are game developers from across the world who try to enter and make a name in the market. All across the world giant tech companies are betting money on game studios, making it all the harder for independent developers to make way
The internet policy in China is also rather tricky, making foreign servers almost inaccessible to the Chinese audience. The internet restrictions only make it possible for the audience to access games on foreign servers with a VPN, but that is a risk you shouldn’t be taking as a serious developer
This also means that they can’ use foreign payment servers, making game transactions harder. When the buying experience is not friendly, the audience often moves on to a more convenient game, creating a gap in your business plan.
How to make it in the market?
Find a partner- To enter the Chinese market, you must have a local partner. A Chinese agency can partner with you to aid with the game distribution and local operations. For instance, Nintendo, a Japanese game developer partnered with Tencent that registers their game, as per the Chinese policies and also the commercials are split between them.
Payment structure- The two payment servers that are approved in the Chinese game market are WeChat Pay and AliPay. You may also register with WFOE China to manage payments and this will also allow you to employ staff and pay them.
Localization- Rule #1, learn about China and its culture. To be able to relate to them it is necessary to know their stories and interests. Right from the development of the content of the game to your marketing plan, you must keep in mind the likes and dislikes of the Chinese audience.
Regular review of compliance- Since it is an evolving market, it is important to constantly keep yourself updated on any developments in the policies. Your local partner will also be accountable for keeping a tab on the news to frequently review your compliance policy.
Conclusion
The most attractive market is no doubt the hardest market to crack- because everybody wants in on it. As a foreigner, it could be hard for you to understand the culture enough to be able to speak to a local through your gaming content. Despite the rest of the world thriving in a remote culture, this is an industry, and a country, that needs you to be on your toes with the local operations.
As a passionate gamer and game developer, you may be forced to wear the businessman’s hat once in a while. If this isn’t your best suit, then it is wise for you to find a partner to look into the business angle of this. With the right framework, and a reliable partner you could build a winning strategy to develop, distribute and popularize your game in one of the world’s best game markets.