This document discusses entering the Chinese mobile game market. It notes that the market is massive, with mobile gaming leading and growing rapidly. The top 10 grossing games take over half of revenues, and genres like shooting and MOBA are growing. Distribution is fragmented across hundreds of Android app stores and a single iOS store. Non-Apple stores take a large revenue share. The document provides advice on how to enter the market, including choosing a local partner and using proven gameplay with Chinese-style art and stories. It emphasizes focusing on engagement over monetization.

1. The Chinese Mobile Market and How to Enter it
June 2016

2. About us

3. 01
An Introduction to the Chinese Market

4. 战略研究中心赢在起点
Mobile Gamers Mobile Device
Users
Mobile Users VS. Mobile Gamers
4% 76%
2010
35 million mobile gamers
2015
314.8 million mobile gamers
Source: EEDAR Deconstructing Mobile Gaming

5. 战略研究中心赢在起点
Mobile Games PC Games Web Games Others (Console, TV）
2010
Total mobile game market volume is 1 billion RMB,
compared with the whole game industry at 33 billion RMB
2015
Total mobile game market volume is 51 billion RMB,
compared with the whole industry at 140 billion RMB
84%
3%
13%
46%38%
16%
0.2%
A Massive Market, Mobile-Lead
Source: China Game Industry Annual Report

6. 战略研究中心赢在起点
4,75
6,74
7,34
7,93
9,84
11,14
12,28
13,10
2,43
3,32
3,86 3,68 4,05
6,17 6,54 6,85
0,00
2,00
4,00
6,00
8,00
10,00
12,00
14,00
14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4
Total Revenue TOP10 Revenue
The total market volume is still
growing, but at a slower pace.
Market Trends
Top 10 grossing games take more than
half of the revenues
Unit: Billion RMB

7. 战略研究中心赢在起点
Game Trends: China
0,45
3,06
0,60
1,43 0,44
1,36
1,28
2,25
1,85
2,30
2,83
0,72
0,94 0,52 0,42
14Q4
15Q4
Turn-based
MMO
6%
2.5D MMO
8%
ARPG
17%
Card games
28%
Strategy
9%
Casual
29%
Turn-based MMO
24%
2.5D MMO
11%
3D MMO
3%
ARPG
10%
Card Games
14%
Strategy
7%
Casual
22%
MOBA
3%
Shooting
4%
Go MMO
Less casual.
Shooting, MOBA are new, growing genres.
Source: NetEase Strategy Development Center
Unit: Billion RMB

8. It’s not just the Apple App Store and Google Play…
Android:
400 stores
iOS:
AppStore vs. Jailbroken Stores
Source: Newzoo Data 2016.04
360 Assistant 24%
Baidu 19%
Huawei 7%
Vivo 5%
Others 5%
Oppo Store 5%
HiMarket 5%

9. In China distribution choice comes at a price..
Advertising space
Apple takes a 30% cut
Android distributors take 40—60%
Distributors compete and offer
preferential terms to big customers or
high-potential titles

10. 02
How to Enter the Chinese Market

11. The Road to China – 3 Choices
3. Be surprising1. Be better 2. Be modest
Bring to market what no game has
brought before.
Compete head-on Don’t aim for the top 100

12. Decide What You Want
Just testing the waters?
Is China one piece of a larger puzzle?
Or are you ready to go all in?

13. There’s Room for a Unique Approach

14. Otherwise There Are Certain Must haves!
Free to Play
PvP and/or Co-op
Suitable Art
Easy Controls

15. Mainstream Art Style and Background Story - Examples
Art: Cute (big head), Chinese
Story: Westward Journey (Classical Chinese
literature)
Art: Cute, leaning to realism
Story: Western magical world
Art: Cartoon, Exaggerated, Lively
Story: No particular storyline,
virtual world
1 2 3

16. FIND A PARTNER
Remember it’s a partnership
Be flexible
Commit to the territory

17. NetEase Development Philosophy
Apply IP to proven gameplay only
Gameplay over Monetization Design
Attract users to spend their prime time, not their bathroom break.
IP is the icing on the cake, not a bait-
and-switch tool
Make games that players like to play. Money will come.
NetEase games are designed to engage users for
several hours per day

18. THANKS
Kristina Blanco: Kristina@netease-na.com