Episode 59: Going Global – How Chinese Gaming Apps can succeed on the global stage

Introduction

Jon Jordan: Hello and welcome to the Mobile Games Playbook. Thanks for tuning in for another episode. This is a podcast all about what makes a great mobile game and what works and doesn’t for mobile game designers.

I’m your host, Jon Jordan, and I’m very pleased I have two experts joining me again today. They’ve been on the podcast many times before, so it’s good to have them back. We have Kalle Heikkinen, the Chief Game Analyst at Liftoff. How’s it going, Kalle?

Kalle Heikinnen: Excellent. How about you, Jon?

Jon Jordan: Not bad, yes. We also have Inka Reinola, who is a game analyst at Liftoff. How’s it going, Inka?

Inka Reinola: Great.

Jon Jordan: Good. You’re showing off your microphone there, making me jealous, very impressive. Good. Of course, we’re not talking about microphones today.

Overview of the Chinese games market

Jon Jordan: If you’ve listened to the podcast before, you will know that Kalle and Inka are Chinese game experts. We have done an episode before on the Chinese market. This time, we’re going a bit more international. In this episode, we’re looking at the games being developed by Chinese developers and how they are taking those global.

One of the big trends we’ve seen is that the Chinese games market has probably been the biggest for a decade now. But what we’ve seen, more recently, is very high-quality games coming out of Chinese game developers on mobile and other platforms and then really being successful in global markets.

Previously, they may have been limited more to China and Southeast Asia. So that’s what we’re focusing on today. And Inka, you’re going to kick us off. So, what are the key trends that you’re seeing as someone who looks at this market very closely?

Inka Reinola: Yeah, first of all, China takes 31 per cent of the worldwide mobile game market. So it’s quite massive, but there’s still room to grow. Anyway, it has been successful in global markets. And I think there are a lot of different kinds of these bigger factors that, from the China side, affect this. Like first of all, there’s like a big talent pool of Chinese people nowadays because they are technologically advanced as a country, and it’s also very like the state organized this kind of technological development too, and it affects mobile companies.

Global expansion of Chinese mobile games

Inka Reinola: They also have this global strategy going on from the state level. So it’s very much focused that way. And there’s also, I can see that Chinese games have some characteristics that Western games don’t really have that have affected this success, too.

First of all, I think one thing is the monetization. They’re a bit different. They do gachas very well. They do events and live ops really well. And they also have a lot of content. They have massive teams and, like I said, a really great talent pool of people and a lot of people working on those. So they can make these kinds of massive games that are much bigger compared to Western markets, I would say.

Jon Jordan: It definitely seems to be the case that China would still be seen as a relatively low-cost place to make games. Obviously, these things are all relative. There are obviously cheaper places now, but compared to maybe, the West Coast (of the USA) is still quite cheap, which means they can have bigger teams.

And I guess what the interesting trend is, is that they’ve always made really good games that have appealed to the Chinese market, but gradually over time, the quality has risen a lot. I think, obviously, on the mobile side, we’ve had the Call of Duty-type games that were developed in China and published by Activision.

Key success factors: talent, monetization, and LiveOps

Jon Jordan: It’s interesting that you said that at a state level, the global market is now seen as something they, the Chinese developers, are encouraged to enter. Can you talk a little bit more about that?

Inka Reinola: At least in China, the States usually have a lot of these kinds of plans, like on a state level that we will do this in five years or something. They have put a lot of effort into technology, such as developing 5G technology, which affects mobile gaming because of the more stable and better internet connection. But maybe Kalle can add something to this if you have it in mind.

Kalle Heikkinen: Yeah, just on the go global initiative that you already mentioned, just to elaborate on that a little bit further. So this includes all kinds of like financial incentives and tax breaks and whatnot to encourage Chinese companies and not only gaming companies, by the way, but this applies to many other industries as well, but that includes gaming too, so to encourage them to go overseas, expand their businesses.

And in gaming, what we see this translate into is, for example, these big investment deals with Western companies. So we’ve seen Tencent acquiring pieces of different kinds of gaming companies, for example, from Remedy and stuff like that.

The role of state support in Chinese game development

Kalle Heikkinen: So that’s definitely one thing, but then what I would also add is that it’s like an encouragement for Chinese companies to go overseas, but there’s also kind of a need to push elements to it as well. So they, the domestic market in China, as many of you probably have heard, is extremely competitive and launching a new game there has been very difficult. It has been difficult for Western companies as well as local Chinese companies.

So, in many ways, you could argue that Western markets are easier, and the competition in many of the genres—especially in mobile games—is a bit softer than it is in China. That’s why we see a lot of Chinese games finding success, especially in 4X strategy, for example, and in many subgenres in the RPG genre, for example.

Jon Jordan: Is that sort of playing into what Inka was saying about having a large team based on LiveOps? We probably mention LiveOps every time in the podcast. And it’s not, I guess it’s not that, Western developers are not good at LiveOps. When you have LiveOps teams that are, sometimes LiveOps teams are like hundreds of people, which are bigger than the dev teams or the complete teams for Western developers.

LiveOps at scale: A competitive edge

Jon Jordan: It just seems to be a different scale when it comes to LiveOps. And I guess when you’re talking stuff like 4X, those games are very driven by LiveOps and events and monetization, aren’t they? So I guess that certain genres that play well with LiveOps are particularly going to be relevant for Chinese developers to push globally.

Kalle Heikkinen: That’s very much true. So we, like everyone, talk about Genshin Impact, which has a huge dev team to support the enormous LiveOps machine that it operates. But we see this also in genres that might be a little bit surprising. We always talk about Chinese mid-core games being very big domestically and overseas. Something that we are seeing right now, which is very interesting, is their expansion into many casual genres.

So there are examples like in the Merge2 space is actually a very good example. Merge Mansion was the king of the hill for a long time, but nowadays, if you look at the markets, Travel Town and then Gossip Harbor from China have actually overtaken Merge Mansion and I would argue that one reason behind that is the masterful execution of LiveOps when it comes to, for example, Gossip Harbor.

Chinese developers entering casual game genres

Kalle Heikkinen: Seaside Escape is another Chinese Merge2 game from the same publisher as Gossip Harbor. But Inka, I know you’re the expert on Gossip Harbor. Do you have anything to add?

Inka Reinola: Yeah, I just wanted to add that as some background; Gossip Harbor copied the idea from another merge game called Love and Pies. So the kind of art style and the story and everything is the same, but what they did differently is that they added a ton of different LiveOps things and more monetization in the game, and they started doing this at the beginning a bit more gradually, and they still like frequently add still new kinds of events, and they are like looking at the market all the time like what’s new and what’s fresh, and they are adding that in there and then Gossip Harbor has been really successful and a lot more successful than Love and Pies, which was the original game, so they really know how to monetize and how to engage the players.

Cultural influences and global appeal of Chinese games

Jon Jordan: Do you think Western audiences are now more open to Chinese cultural elements? Games like Black Myth: Wukong, for example, are still focused on what we might call Chinese IPs. There’s certain genres that are very popular in China, and the games we’re seeing being popular globally. Is it partly that Western audiences are now more open to that sort of culture? Or are we seeing it more to do with Chinese developers finding their own IP?

Kalle Heikkinen: Yeah, we actually discussed this with Inka before the podcast recording. It’s a very interesting topic because it feels like, at least for a long time, that Chinese developers have thought that utilizing Chinese cultural elements or Chinese cultural heritage is maybe not something that they want to bet on when expanding to overseas markets.

But then again, as you said with the Black Myth: Wukong, which definitely takes advantage of these Chinese characteristics. I think part of that reason is that they really wanted to do that for that game to be a hit in the Chinese market as well. So obviously catering, if you want to credit that audience, then using the Chinese cultural elements makes a lot of sense, but as we have seen, this game has been a massive hit also in the Western market.

You could then make the argument that utilizing those assets can actually be super interesting for the Western audience as well. So it’s going to be very interesting to see now, looking at the future, whether we are going to see more games that take advantage of or explore these Chinese cultural elements.

Inka Reinola: Yeah, I wanted to add that I feel like overall, people are maybe a bit more open to having different kinds of cultural products than just like US culture-based products in mainstream things too…

Monetization strategies and player experience

Kalle Heikkinen: …And also, it’s good to remember that overseas markets do not equal Western markets. So markets like Korea and Japan are hugely important for Chinese developers. They’re big markets. So also, if we think about anime art style and stuff like that, it is something that we all know resonates very well in Japan. So there are reasons to explore that kind of art style also, even if you’re not interested in the Western markets at all.

Jon Jordan: I guess a game like Gossip Harbor, you wouldn’t know unless you looked at it, that it was a Chinese game. It’s just a typical casual game.

Kalle Heikkinen: Yeah, that’s true. That’s true.

Recommendations and final thoughts

Jon Jordan: As we’re coming to an end, it’s always good to give people some homework. What games should they be downloading to get a feel for what we’ve discussed?

Inka Reinola: Gossip Harbor is a really good example, and it’s very successful and one of the top games in the merge genre, so that one definitely. And then I would say the Chapters games are also very interesting. It’s very different from many other games in the market, so worth checking out.

Jon Jordan: Maybe you could download Gossip Harbor and Love and Pies and then do a comparison between the two. That would be for advanced-level homework.

Kalle Heikkinen: Let’s go with those that Inka mentioned. Yeah, I think those are good. Good.

Jon Jordan: Thank you very much to our experts for their conversation today.

Thank you, Inka. And thank you, Kalle. And thank you for watching and listening to the podcast. However, you consume it every episode. We are talking about what’s going on in the mobile game industry, the biggest part of the games industry globally! There is so much going on all the time. Please subscribe. Don’t miss out. And we will see you next time.

Bye-bye.