For developers looking to enter new markets, China is especially tempting. The opportunity is massive – more than 550 million smartphones and tablets are active in the country. A huge percent of these have gaming apps installed.
But, once developers start looking into what it takes, it quickly becomes daunting. How to meet that challenge was the topic of Colin Behr’s presentation at GDC today.
“I won’t deny that it’s challenging,” he began. “But it is possible. Because if you enter the market, you’re taking control of your app. And it’s worth being in the driver’s seat because the opportunity is huge.”
In his talk, Behr, Vungle’s VP of Business Development and International, walked attendees through 7 realities of publishing in China. See his slides here and read on for top takeaways.
Reality #1: Android Dominates the Market
Android currently has 80.4% of market share in China. As follows, it also drives about 80 percent of mobile gaming revenue in the country, according to Chukong.
“There are a number of devices that are very high-end but also very affordable,” said Behr. “The allure of the iPhone is growing, especially in larger cities like Beijing or Shanghai, but many prefer the more practical Android models developed by Chinese manufacturers.”
Of course, Apple is one to watch. Its recent successful launch of iPhone 6 and 6+ caused Android’s marketshare to drop for the first time since 2013.
Reality #2: 100s of App Stores = A Fractured Market
Given the large Android market, most people expect Google Play will play a significant role for app downloads. But most Chinese smartphone users don’t have access to Google Play. It doesn’t come pre-loaded and it’s not even possible to install. Umeng Analytics found that Chinese consumers only used Google Play to download 5% of the apps on their phones or tablets. The vast majority — a full 72.6%, Umeng found — are from third-party app stores.
By some estimates, there are 400 different distribution platforms. Some are tied to the device/manufacturer. OEM Xiaomi offers an app store pre-loaded with apps. Some are run by large tech companies. Tencent, China’s largest web portal, has its own app store MyApp– which now sees 64 million daily app downloads. Search Giants Baidu and Qihoo also have their own app stores.
Reality #3: Culturalization is Critical
Not only do publishers have to learn distribution models, it’s important to also make sure the game you create is relevant for a Chinese audience.
“A classic example of this is Plants vs. Zombies: Great Wall Edition,” says Behr. “Popcap released this just for the Chinese market – the zombies were dressed like ancient warriors and the location changed. Behind the scenes, they actually reduced the size of the game to make it less of a strain on user’s data.”
So, what makes for good culturalization? For one, it’s building scenarios that make sense to that audience or tie the game to certain holiday or local events. And to monetize, ensure that you’re running ads in the correct language.
Reality #4: Mobile Piracy is Rampant
“It’s possible your APK has been scraped and your game is already being played in China,” says Behr. Piracy is much more common due to the tech savvy of the average user. “Chinese users may play your game without permission or without paying, and competitors may steal your title or simply release their own version of it and make money off your IP.”
Combating this isn’t easy. Some developers have had success taking legal action or appealing to the app store distributing its app, but overall it’s key to move forward. “Instead make an awesome game and make the most of the opportunity in China.”
Reality #5: Social Doesn’t Mean Facebook and Twitter
Social integration is often a key part of games in the US – allowing players to invite friends or share their progress on Facebook or Twitter – but it’s very different in China. Facebook and Twitter aren’t accessible; instead, there are other large players including WeChat (a messaging app), Sina Weibo, Tencent Weibo, and Qzone.
People love to compete and play with friends Any of these networks can be useful to integrate into your app, where applicable, used for promotion.
Reality #6: Your APK Must Be Hosted in Country
Making sure you can get behind the Chinese firewall is a big piece of the puzzle. If you want users to be able to download the APK, the file must be housed in the country.
“Many work with publishers from the beginning for help with all of this. It requires a complex process – entities and special licenses. This should be part of your decision process on how you want to do this.”
Reality #7: Monetization Must Go Beyond IAPs
Think twice before releasing a paid app. “In China, it can be just as difficult to release a paid app as it is in the US,” says Behr. There are some genres that users are willing to spend more on. Card battle, turn-based RPG, and MMORPG games account for more than 70% of total mobile games’ earnings. But overall, a f2p approach is going to set you up for success.”
Use the right billing partners to boost IAP. In a F2P game, IAP is going to be an important piece of monetization. To make sure people can easily pay for these items, a smooth payment process is essential for Chinese users – if it’s not, they’ll quickly abandon the game. Alipay and Union Pay are currently leading the pack, so working with these companies to integrate payment into your app will put you in good shape.
Advertising is effective. Incorporating advertising into your app in China can be a successful way to monetize users who don’t purchase IAPs. Research shows that Chinese consumers are very receptive to advertising, especially video advertising.
“Add users’ receptivity to ads with their willingness to make in-app purchases, and China becomes a potentially extremely lucrative market,” says Behr.
Plan for monetization from the beginning. The median half-life for game apps is only two months. Whether you’re using video ads or another monetization strategy, the key thing is to think about monetization during the game development process, so you’ll be prepared to ride the wave of popularity.
What’s a publisher to do?
“A smaller game developer will want to work with a third-party for sure, like Chukong or Yodo1 or Dreamsky,” says Behr. “A publisher will assist you from end-to-end – both in localizing your game for the market as well as distributing it to the right places. Ultimately, go to China first to start the exploration process.
“Talk to publishers or others there and see who will be a good fit. If you are a larger publisher, you may want to think about going into the market yourself. But go talk to as many people as you can and figure out based on the feedback you get as to what’s right for your business.”
View Colin’s slide deck here. For more coverage from #GDC15, subscribe to the Vungle blog in the right sidebar.