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China for the Win! What Publishers Need to Know to Succeed in this Emerging Market
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Tips for mobile game publishers on how to successfully bring their apps to market in the vast and rapidly growing Chinese market.
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China for the Win! What Publishers Need to Know to Succeed in this Emerging Market
- CHINA FOR THE WIN! What Publishers Need to Know to Succeed in This Emerging Market Infrastructure for in-app video advertising
- 2 A LITTLE ABOUT ME Colin Behr VP, Business Development & International @colinnathanbehr colin.behr@vungle.com
- 3 10,000 196 countries served 2 Billion+ monthly video views 200 Million monthly unique devices top apps
- 4 IF YOU REMEMBER ANYTHING FROM THE SESSION… The opportunity is vast Entering China is complex, but not impossible Control is worth the challenge 1 2 3
- 5 HOW VAST? 550M mobile devices 240M mobile devices 96%have at least one gaming app installed 28% spend more than an hour a day playing Chinese mobile gamers install a new game every 3.48 days Sources: Nielsen: bit.ly/17gCjes; TalkingData: bit.ly/1JqaPVf; Venture Beat: http://ow.ly/JHAIZ; Pew Research: http://ow.ly/JHAPl
- 6 2014 GROWTH IN MOBILE GAMES Developers 84% 236% Total Revenue Source: talkingdata.com/index/#/datareport/-1/en_us Users 162%
- 7 7 Realities of Publishing in China
- 8 Reality #1: Android dominates the market
- 9 ANDROID DOMINATES THE MARKET 68% market share 32% market share Source: talkingdata.com/index/#/datareport/-1/en_us
- 10 Source: xiaomishop.com
- 11 GOOGLE’S MARKET SHARE IN CHINA “Chinese Android users only used Google Play for downloading 5.6% of all mobile apps on their devices.” -Umeng Analytics 68% 5.6% Source: Umeng Analytics; TalkingData
- 12 Reality #2: 100s of app stores = a fractured market
- 13 72.6% of apps in China are from alternative app stores Source: bit.ly/1Lemowm
- 14 360 MOBILE ASSISTANT • 360 is virus prevention software • Huge Android app store • 275 million monthly users • 30 billion downloads • Offers localization support to developers
- 15 TENCENT MYAPP After captivating players in the US, MinoMonsters sought to reach an international audience. Partnering with Vungle, MinoMonsters attained a 6x increase in installs worldwide.• Developed by Tencent, who started messenger QQ (829 million active users) • Also connects to QQ browser and WeChat • 110 million daily downloads (Dec 2014) • King launched Candy Crush Saga on Tencent
- 16 BAIDU After captivating players in the US, MinoMonsters sought to reach an international audience. Partnering with Vungle, MinoMonsters attained a 6x increase in installs worldwide.• Search giant used by more than 700 million • Has its own app store with direct integration to search results • Recently acquired 91 Wireless, increasing its reach into app distribution
- 17 Reality #3: Culturalization is critical
- 18 LOCALIZATION VS. CULTURALIZATION PocketGems is a leading mobile game developer with over 150M downloads. Vungle drives a record-breaking volume of impressions for PocketGems worldwide. Source: bit.ly/1vHbYfA
- 19 GOOD CULTURALIZATION PocketGems is a leading mobile game developer with over 150M downloads. Vungle drives a record-breaking volume of impressions for PocketGems worldwide. ▪ Use culturally relevant scenarios ▪ Tie thematically into holidays ▪ Run relevant advertising
- 20 Reality #4: Mobile piracy is rampant
- 21 MOBILE PIRACY IS RAMPANT PocketGems is a leading mobile game developer with over 150M downloads. Vungle drives a record-breaking volume of impressions for PocketGems worldwide. Consumer piracy Competitor piracy
- 22 Reality #5: Social doesn’t mean Facebook and Twitter
- 23 Wechat (Weixen) Messenger app Sina Weibo “Chinese Twitter” RenRen (means “schoolyard”) Social network for college students or connecting with old friends Tencent Weibo Microblogging with focus on communication among friends QQ & Qzone Messenger app & Facebook- style social network 73% of market share +
- 24 Reality #6: Your APK must be hosted in country
- 25
- 26 Reality #7: Monetization must go beyond IAPs
- 27 SUCCESS WITH A PAID APP IS POSSIBLE, BUT HARDER 31.2% 11.3% 17.3% 23.4% 4.7% 4.3% 2.3% 3.8% 1.7% Card Battle SLG MMORPG Turn-based RPG Action Card & Board Tower Defense Casual Other Paid App Revenue by Genre Source: TalkingData bit.ly/1JqaPVf
- 28 CHINESE USERS ARE SPENDING MORE MONEY IN APPS 8.7% 9.6% 5.4% 4.7% 6.7% 8.5% 3.8% 5.0% 9.5% 9.2% 7.4% 6.9% 9.6% 10.9% 6.6% 6.5% Card Game Chess Game Simulation Strategy Action RPG Puzzle Casual Android In-App Purchase Revenue by Genre Source: talkingdata.com/index/#/datareport/-1/en_us
- 29 CHINESE USERS ARE SPENDING MORE MONEY IN APPS 6.5% 3.5% 5.8% 6.7% 6.6% 7.2% 4.6% 2.7% 10.8% 3.8% 9.4% 8.5% 9.4% 9.5% 4.1% 3.0% Card Game Chess Game Simulation Strategy Action RPG Puzzle Casual iOS In-App Purchase Revenue by Genre Source: talkingdata.com/index/#/datareport/-1/en_us
- 30 USE THE RIGHT BILLING PARTNERS TO BOOST IAPS Transactions by Payment Method Spend by Payment Method AliPay, 59% AliPay, 49% UniPay, 20% UniPay, 25% TenPay, 10% TenPay, 13% Service Card, 7% Service Card, 7% Pre-paid Card, 4% Pre-paid Card, 6% Source: TalkingData bit.ly/1JqaPVf
- 31 In China, 9 in 10 smartphone owners clicked on a mobile advertisement in the past month. MOBILE ADVERTISING FORMAT CHINA % Video 36 Mobile coupon 33 Banner 9 Ad displayer after in-app activity 8 Search 7 Text 4 Audio 2 Other 1 Source: “Mobile Advertising in China,” Price Waterhouse Cooper, May 2014
- 33 In-app video ads extended user session length by 25%
- 34 PLAN FOR MONETIZATION FROM THE BEGINNING Peak Median half-life of games: 2 months post-peak$ Source: Benchmarking the Half-Life and Decay of Mobile Apps, Flurry.com 2/20/14
- 35 PARTNERS
- 36 WHERE DOES THIS LEAVE YOU? DEPENDS ON YOUR SIZE. CASUAL/ LOW LTV MIDCORE HARDCORE SMALL Publisher Direct/Publishe r X LARGE Publisher Direct/Publishe r Direct/In- house
- 37 IF YOU REMEMBER ANYTHING FROM THE SESSION… The opportunity is vast Entering China is complex, but not impossible Control is worth the challenge 1 2 3
- 38 MEET THE SPEAKERS! Join us tonight from 6-8pm @ Oola (RSVP in back) Ben Bear VP, Sales Colin Behr VP, Business Development and International Michal Pilawski VP, Product Jahed Momand Sr. UX Designer
- Q&A Questions?
- CHINA FOR THE WIN! What Publishers Need to Know to Succeed in This Emerging Market Infrastructure for in-app video advertising
Editor's Notes
- Hi – I’m Colin
- App ecosystem is growing. Apps are everywhere and the opportunity goes far beyond mobile devices. We’re seeing apps on wearables, in cars, in home automation, things like refrigerators, coffee machines.… We believe apps are here to stay which is why we’re building our infrastructure around it.
- • Three things to take away from today’s session: You’re going to hear a lot during GDC about how publishing in China is incredibly complex. I won’t deny that it’s challenging – but it is possible. And it’s worth the challenge … Because if you enter the market, you’re taking control of your app. App piracy is very common in China, so it’s very possible a pirated version of your app is already being played. Often app stores or users will scrape the APK file, install it to their phone – and in those times, you aren’t in control. But, taking your app direct to China will put you in the driver’s seat. And it’s worth being in the driver’s seat because the opportunity is huge. The Chinese mobile market is growing fast and very open to downloading and playing games.
- • I’d like to share a couple of stats to give you an idea of how big the market and opportunity is before we dive into the rest of the content. • At the end of 2014, there were 550 million active smartphone and tablet devices in China. Of these, 96% of these have at least one gaming app installed. Often, new devices come with pre-installed apps, content dependent on the manufacturer. We’ll go more into this later, but suffice it to say that Chinese consumers are comfortable and familiar with mobile gaming. • In fact, 28% of Chinese consumers reported that they spent more than an hour a day playing mobile games. They install a new game every few days. • Using apps, in general, is simply part of Chinese life. According to a Nielsen, Chinese consumers (as well as Americans) are the heaviest app users in the world. Sources: Nielsen: bit.ly/17gCjes TalkingData: bit.ly/1JqaPVf http://venturebeat.com/2015/02/05/emarketer-only-a-third-of-us-mobile-users-will-pay-for-apps-in-2015/ http://www.pewinternet.org/fact-sheets/mobile-technology-fact-sheet/
- Not only is the Chinese mobile market huge, it’s also growing explosively. 2014 saw 84% more mobile game developers, nearly two and a half times more users, and 162% more revenue from mobile gaming overall.
- • So, how do enter this market and win the hearts and market share you’re hoping for? Today I’m going to cover off on 7 realities of the Chinese mobile landscape and what they mean for you.
- Android currently has 80.4% of market share in China. • Where the market is, the revenue follows. While iOS users are often cited as the highest spenders, Android users aren’t afraid of in-app purchases. Android also drives about 80 percent of mobile gaming revenue in the country, according to Chukong. • It’s important to note that Apple had an incredibly successful launch recently of iPhone 6 and 6+ - Android's share of the smartphone market actually dropped for the first time since 2013. So, Apple does have a presence there and many of the same rules apply in terms of making a successful game. But, iOS, in terms of market share is still just getting its food in the door. Bottom line is that launching on Android is likely going to get you access to a larger audience at this point.
- • So, why is Android so prevalent in the Asian market? Android devices are more prevalent and often cheaper than Apple devices. Those living in small to mid-size cities may be looking for a more affordable model. This tablet on the slide is the Xiaomi MiPad – it retails for $260 dollars or 1,600 Yuan. 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.
- • Given the large Android market, you might expect Google Play to have a huge presence there. But in fact, 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. Chinese consumers only used Google Play to download 5% of the apps on their phones or tablets. • So, the vast majority of Android apps downloaded in China — a full 72.6%, Umeng found — are from third-party app stores. Which leads to our second reality for publishing in China.
- • There are 100s of App Stores that have filled the gap left by Google Play – and that is literally 100s. By one estimate 400 different distribution platforms. Generally, they fall into a few key categories. • There are app stores tied to the device/manufacturer. Xiaomi, the OEM Ithat developed the RedMi, offers an app store pre-loaded with apps of their choosing. • There are app stores tied to most big tech companies or social companies as well. For example Tencent, China’s largest web portal, has its own popular app store MyApp– which now sees 64 million daily app downloads. Search Giants Baidu and Qihoo also have their own app stores, which benefit from install tie-in to search recommendations. • Then there are start-ups like Wandoujia, which helms one of the largest indie Android app stores. • This is a chart from iMedia in China breaking down the market share by app for Q1 2014. These are really some of the biggest players in app store market. Let’s take a look at the three biggest. Source: bit.ly/1Lemowm
- • 360 Mobile Assistant is one of the biggest, if not the biggest app platform app store, with 275 million monthly users. They’ve had about 30 billion downloads to date. • 360 is actually a virus prevention software. Due to this parent company, it has an emphasis on security and self-proclaimed high-quality standards. • They also offer some direct support for devs in translating and localizing their games.
- • Another big player is Tencent Myapp. Tencent is behind QQ, a huge Chinese messaging app with 829 million active users and 110 million daily downloads. Because of this they offer some unique download opportunities through the QQ browser and an integration with WeChat. • King actually launched Candy Crush Saga in August of last year on Tencent Myapp, in their play to hit a big Chinese audience.
- Search giant used by more than 700 million Has its own app store with direct integration to search results. Users can click to install the windows app store straight from search results. Recently acquired 91 Wireless’ HiMarket, increasing its reach into app distribution, it is a dominant force in the mobile market
- Let’s move onto the third reality. Not only do you have to learn distribution models, it’s important to also make sure your game itself is relevant for a Chinese audience. •
- • There are two elements to this – one is localization. This includes translation, making sure the voiceovers are in the proper language or dialect, perhaps changing the music to reflect the region. • But equally important is culturalization – Your game will do better with scenarios that are compelling to a Chinese audience. • A classic example of deep culturalization is Plants vs Zombies: Great Wall Edition. Popcap, the game developer for Plants vs Zombies released this edition just for the Chinese market – the zombies were dressed in ancient Chinese warrior outfits and the location changed as well. Behind the scenes, they actually reduced the size of the game to make it less of a strain on user’s data and easier for Chinese users to download. And they released merchandise for the game into the market, which can be helpful marketing effort in China to create broader awareness of the game. All this led to it being one of the most successful titles in the Chinese market. Source: bit.ly/1vHbYfA
- • So, what makes for good culturalization? For one, it’s building scenarios that make sense to that audience – for example, we saw a race-car driving game that added a course for Bejing where you could drive through that city. Plants vs. Zombies took it a step further by re-skinning the entire game. • Another strong connection is tying the game to certain holiday or local events. Angry Birds created a new game around the Chinese Moon Festival – instead of golden eggs, the goal is to search for eight hidden golden mooncake pieces. Mooncakes are traditionally served at this event in China. • And then, when it comes to monetization, ensure that you’re running ads in the correct language. Ad platforms like Vungle can provide you with the right fill and creative to make sure the experience makes sense for every user.
- • Reality #4: Piracy is very, very common. We talked about this in the beginning when we discussed that it’s possible your APK has been scraped and your game is already being played in China. • There are really two key types of piracy. Consumer piracy: Chinese users playing your game without permission or without paying. Many people will jailbreak phones in China to do this. And competitor piracy, this is IP theft, competitors stealing your title or simply releasing their own version of it and making money off your IP. • The challenge in combating this is that it’s not easy to get users or competitors to stop. Some developers have had success taking legal action or appealing to the app store distributing its app. Rovio actually bought out one of the publishers ripping off their games. But these are not easy routes for a small developer with fewer resources or less name recognition. • Bottom line, don’t spend too much time worrying, instead make an awesome game and make the most of the opportunity in China. There’s only so much you can do, so focus on making an incredible game that’s going to draw and engage players.
- • Reality #5, social integration into your game is very different in China. 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. • In China, the big players aren’t Facebook and Twitter. And in fact there are more large social networks with over 100 million users - than in other parts of the US. • It’s important to be aware of how to integrate these networks. People love to compete and play with friends, and Chinese especially like social gaming. Let’s take a quick look at some of the largest key networks. • Sina Weibo. This is one of the huge social players in China. They are similar to Twitter with a micro-blogging format, it’s also used by a lot of celebrities and big influencers. Sina offers open API integration to game developers – and can be powerful to build into your game for sharing and or play invitations. • RenRen – Actually stands for schoolyard. This is primarily used by college students or connecting with old friends. • Wechat – This messaging app extremely popular in China and it’s both mobile focused and more internationally focused than QQ. QQ is a messenger app with about 800 million users, tied into Qzone, a Facebook style social network. Wechat has had significant spread into the global market, while QQ is still relatively unknown outside of China. • qZone is a social network tied in some ways to QQ. It allows users to keep diaries, message with friends, post videos, and personalize their pages with for-pay accessories. • And then there’s Tencent Weibo, another microblogging tool similar to Sina. Tecent also offers an open API for developers. • So, these are the networks to be aware of. Any of these networks can be useful, as well, for promoting your app. But before going down that road make sure to consult with someone who understand the dynamics at play so you can build the right kind of presence.
- • The firewall issue is real. Use servers hosted in China or close enough that you can provide quality service to the country. • Will need a partner in-country if not working with a publisher.
- • Now, let’s shift to monetization. A lot of what I shared with you today is going to ensure that you have a game that is monetizable. But there are also some practical things you need to know about setting up your game to make money. • First, there’s whether you launch a paid or free-to-play app. Most app developers know that struggle well. When it comes to China it can be just as difficult to release a paid app as it is in the US. Chinese consumers, while they are willing to spend money in apps, don’t tend to like purchasing games. There are some genres that users are willing to spend more on – card battles, for example are very popular– but overall, a f2p approach is going to set you up for success. **Note from original chart: “Card battle, turn-based RPG, and MMORPG games account for more than 70% of total mobile games’ earnings. The low development cost and high profit return nature of card games is still a key point of attraction for developers. The proportion of earnings from casual games has increased.” Source: TalkingData bit.ly/1JqaPVf
- Think Chinese consumers don’t spend money in games? Think again. More and more users are making in-app purchases in games. In many categories it’s around 10% of players, which is approximately twice the rate of users in the U.S. And numbers are growing. You can see that there has been growth in every category except for one (chess games) over the course of 2014, with overall average growth of 33%. Source: TalkingData https://www.talkingdata.com/index/#/datareport/-1/en_us
- The trend is the same across platforms. On iOS there has also been growth in every category except for one (puzzle games) over the course of 2014, with overall average growth of 30%. In half of these categories upwards of 9% of users are spending money in games. Source: TalkingData https://www.talkingdata.com/index/#/datareport/-1/en_us
- • 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. • Talking Data found that 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. **Note from original chart: “Which payment methods do players prefer? The proportion of pre-pay cards and service cards are gradually dwindling. Payment via Alipay has become the mainstream pre-pay method. Source: TalkingData bit.ly/1JqaPVf
- • Then, of course, we come to advertising – Vungle’s bailiwick. • Advertising is a critical way developers across the world are monetizing their games, and research shows that Chinese consumers are very receptive to advertising – being more willing to click on mobile ads as well as less averse to them then other countries. Specifically here on the slide you can see the preferred format of ads they’d like to see - the majority said either video or mobile coupon ads. This may be due to the fact that watching ads in exchange for content is a common practice in China on sites like Youku. Incorporating advertising into your app in China can be a successful way to monetize users who don’t purchase IAPs. Add users’ receptivity to ads with their willingness to make in-app purchases, and China becomes a potentially extremely lucrative market. http://www.pwccn.com/webmedia/doc/635358539404587393_mobile_ad_china_cut_may2014.pdf
- • If you bring video advertising into your app, there are a lot of different kinds of placements that are available. I want to dive into our opt-in placement we recommend most often. This is when developers choose to provide rewards, like in-app currency or extra life, to users who watch these ads. These opt-in, value-exchange ads have been found have a higher click-through rates than non-rewarded ads. • They work because they can be customized to appear at natural breaking points in the game—let’s say, at the end of a level or when your character dies. This provides something of value for both the user and the advertiser. • Here’s an example
- • I’ll share an example here from one of our customers Zombie Catcher. This is a wildly successful game from Finnish studio Two Men and a Dog, seing 1.5 million downloads in the first week alone. • The co-founders, veterans of game development, knew that IAPs wouldn’t be enough to monetize the game, so they added Vungle video ads to complement this. • They implemented an opt-in placement that gives players faster access to zombies. Normally users only get two “catching sessions” before they have to wait. Watching a 15-second ad allows them to capture the undead again – right away. • Turns out, getting back in the game faster also encourages players to stay in the game longer. Kallonen estimates that video ads extend player session time by more than 25 percent. • Through the opt-in placement, Zombie Catchers is also able to monetize more users. As an industry average, less than 5 percent of users will make in-app purchases. Mobile video ensures the other 95 doesn’t fall by the wayside. Through Vungle, Zombie Catchers monetized more than 50% of their users – 25 times more users than if only IAPs had been used.
- Whether you’re using video ads or another monetization strategy, the key thing is to think about monetization during the game development process. The founders of Zombie Catchers added Vungle video ads from the very beginning. Though it’s impossible to predict when your app will peak, the median half-life for game apps is only two months. Monetizing from the beginning ensures you’ll be prepared to ride the wave of popularity (and boost revenue) that might occur after you release your app.
- • At this point you might be thinking – how am I going to manage to navigate this, how am I going to figure out how to distribute my game? There are a couple of directions you can take here – and what you do really depends on your size. • if you’re publishing a casual game, or even mid-core in some cases – it’s going to be easiest and most effective to go with a publisher, like Chukong or Yoda1 or Dreamsky. 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. They will have relationships with the app stores and monetization partners like Vungle that can help you build revenue. The only thing is that they will take a cut of your game – that’s the price of admission – but they can certainly bring it to a wider audience then you might be able to do on your own. • If you are a larger publisher, you may have the resources to go direct to market. You’ll still need a local partner to host your APK and integrate payment methods, but you’ll keep much more of the revenue in this case.
- • Three things to take away from today’s session: You’re going to hear a lot during GDC about how publishing in China is incredibly complex. I won’t deny that it’s challenging – but it is possible. And it’s worth the challenge … Because if you enter the market, you’re taking control of your app. App piracy is very common in China, so it’s very possible a pirated version of your app is already being played. Often app stores or users will scrape the APK file, install it to their phone – and in those times, you aren’t in control. But, taking your app direct to China will put you in the driver’s seat. And it’s worth being in the driver’s seat because the opportunity is huge. The Chinese mobile market is growing fast and very open to downloading and playing games.
- Drop us your business card to be added to the list!
- Hi – I’m Colin
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