Gaming consultant Josh Burns analyzes the opportunities and challenges in five key Asian markets and presents a nine-step process to start selling your mobile game in this region of the globe.
At the Montreal International Games Summit (MIGS) 2016, mobile and gaming industry consultant Josh Burns challenged game developers to start thinking in a truly ‘global’ way with respect to launching new content.
Currently, game promotions in the Western hemisphere focus mainly on North America, Europe and Australia, but there are significant opportunities elsewhere, especially in Asia.
In terms of global revenue, three out of the four dominant mobile gaming markets are in Asia: China, Japan and South Korea. “If you think about the global gaming market in general, almost 50% of the opportunities are in Asia, and that’s across PC, console, and mobile,” explains Burns.
Of course, while exporting opportunities abound in Asia, there are still many challenges to overcome seeing as Asian players’ demands are significantly different. A quick way to visualize this is to look at the top-grossing charts:
“Things are very predictable across the West. It’s Clash Royal, Candy Crush. And then you look at Japan, Korea and China, and the content is totally different,” explains Burns.
Not only is the visual look of successful games very different in Asia, but the gaming experience is also often more complex. “Coming from the West to Asia, the gameplay experience is very often too simple,” says Burns.
Real-time gaming guild battle 21 vs 21 in the mobile game “Idea” from Netmarble Games.
Opportunities and challenges in key Asian markets
Despite these challenges, Asia still offers many opportunities for western mobile game developers. In his MIGS2016 presentation, Josh Burns focused on five key Asian markets (opportunities in green, challenges in red):
Here’s a detailed look at these five markets:
- There is a huge monetization potential per user in the Japanese market. When looking at all app categories, whether free or not, the average revenue per download sits at $6.
- Mobile gaming accounts for over 50% of the video game market.
- Local content dominates. “It’s basically Japanese companies making games for Japanese mobile gamers,” says Burns.
- Because it’s a small market, the marketing costs are very high.
- To this day, the success of Western mobile content in Japan has been minimal.
- It’s the largest mobile gaming market. Half of China’s population now uses a mobile device to surf the web.
- Revenue grew by 40% from 2015 to 2016. There are still lots of opportunities in China, even if the market is slowing down.
- There are already half a billion smartphones in the country.
- Android fragmentation: About two thirds of the market is still really fragmented.
- Local mobile gaming players dominate. Tencent and Netease alone control roughly 50% of the market.
- Technological limitations: “You have tons of generic, really low-end Android devices. Also, from a network perspective, many are still based on 2G or 3G technology,” explains Burns. Developers also need to look at data caps and focus on a game that doesn’t require a huge download or data usage on an ongoing basis.
It’s a very technologically advanced market, with one of highest smartphone penetration rates in the world.
- 80% smartphone penetration with an excellent mobile network. “A top-grossing game is a 1 GB download,” explains Burns. “You can download it in under a minute on the network there.”
- iTunes and Google Play account for 80% of the mobile content market.
- The mobile market is estimated at close to $2B.
- The local messaging platform (Kakao) remains a powerful way to reach players, but it’s getting saturated with content.
- Significant marketing budgets are needed to stand out. “People are taking over the city, [using] large physical spaces for advertising, doing high-budget TV campaigns, bringing in local celebrities,” says Burns.
- Western games are often not very appealing to this market.
Taiwan, Hong Kong and Macau
- There is free Wi-Fi everywhere, meaning that people can almost always play a mobile game on the go.
- The games that sell well in China sell well in this market after some additional localization.
- The market is less competitive than in China seeing as there aren’t as many companies that focus on these countries.
- The market remains relatively small.
- There are payment issues. “A lot of developers are using third-party payments where you’re in the game and there’s a link to the website. You log in with your ID and you use other payment methods to add money to your account. From a western perspective, this represents a lot of additional work,” says Burns.
- Pay-to-win is the primary model. “This is what users expect in a game experience,” explains Burns.
While the size of this market, which includes Thailand, Vietnam, Singapore, Malaysia, the Philippines and Indonesia, is still quite small, its 2015–2019 compound annual growth rate (CAGR) is forecast at 45.7% according to Newzoo (the global average is 14.6%).
“If you’re a smaller company, you can carve out something there to be successful and grow with the market,” believes Burns.
- This market has a strong PC gaming history and interest for more traditional mid-core genres. For example, most of Blizzard’s games are very popular there.
- It’s a small market, but it’s growing at an incredible pace.
- One of the great things about this market is the strong appeal of Western games. This means you don’t have to make significant changes to the game itself when you export it to South-East Asia.
- This market is made up of a patchwork of countries: many languages need to be supported.
- Local distribution channels make it hard to reach players. “[Game publishers] have created these large mobile audiences, either through e-commerce, social networking or messaging, and they control them. You can’t just submit your game to them. It’s only for the games they publish or work on,” explains Burns.
- Local payment is necessary, but it’s very fragmented. For now, there are no global or offline payment options that really work.
Nine steps to capture local revenue in Asia
“People think that to be successful or to do anything in these markets, you need to take very extreme measures,” says Burns. He cites as an example the work that Disney did to adapt its mobile game Where’s My Water for the Chinese market. The game was completely changed, from its looks to its characters.
“But this isn’t what you need to do as a first step!” he assures. “There are many incremental steps that you can take, and I think a lot people get stuck in this paralysis of ‘Oh this is going to be so much work! I don’t have the resources to do it.’ The reality is that you can actually do a lot more.”
He suggests a nine-step process to gradually capture local revenue in Asia.
Localize app store materials. “Nobody will download your game if its name and information in the app store isn’t translated in the local language,” says Burns.
- Localize in-game text.
Add local support and operations. “Have somebody in-house who speaks Japanese [for example] and who can provide customer support, go online and build a community. This has been very successful for a lot of companies to take it to the next level,” explains Burns.
Add unique local in-game content. Burns gives as an example the game Subway Surfers. “It’s been extremely successful in China in part because they added this one character that resonates with the audience there,” says Burns.
Engage in local marketing activities.
Integrate local payment options.
Look at distributing through local channels. For example, add your game to the Tencent Android platform in China. There’s a lot complexities and government regulations to deal with, but Burns suggests working with local partners for assistance.
- Adjust your monetization strategy.
- Create a custom version of your game for local markets.
“No matter the size of your studio, the key is to start taking these steps and see what happens,” says Burns. That way, a studio can test the waters and see if its game resonates with one of these markets, without spending a huge amount of time and money.
His final piece of advice is: “[These other markets are] always worth exploring, even at a very minimal level!”