China Mobile Gaming Market Outlook Independent Studies For Entering The Market
Mobile Gaming : Global Market Overview Global Mobile Games Impetus For Growth Globally Download Revenue ($ Million)1 • “Faster network (3G) and devices with larger 3349 screens will help improve the discovery process” – 2003 2004 2005 2006 2007 Paul Goode, Vice President, Product 2592 Development and Senior Analyst, M:Metric3 1,669 • “One thing driving mobile gaming in developed 1,070 market is the availability of faster processor in mobile device, which enable faster response 469 times, 3-D graphics and advanced sound capabilities, as well as less-expensive and bigger $0 $1,000 $2,000 $3,000 $4,000 $5,000 storage capabilities for memory-intensive game” – Future Outlook Nick Ingelbrecht, Research Director at Gartner,4 (In $ Million)2 photocontent.com 7,350 • Maidy, Shane A, “MobileCorner:Gaming Goes2011 Mobile”,Licence!, July. 2006. 9(6),p:123. • “Gartner Say Worldwide Mobile Gaming Revenue To Grow 50 Percent in 2007”; available from 6,500 http://www.phonecontent.com/bm/news/1855.shtml;2010 accessed 17 April 2008. 55002009 $5,000 $6,000 $7,000 $8,000 • Armitt Claire, “Global mobile game downloads set for six fold increase by 2010”, New Media Age, 4 November 2004, p:15. • Ibid.
Foreign Participation On Mobile Data Services Was Capped At 50% On“Accumulated Basis For Investment” Under WTO. • Mobile Service Offering China Mobile Industry Structure5 – Customer get three different services: Mobile handsets Mobile access Mobile contentUpstream • Mobile Content Equipment – Describe as value added services, other thanActivities voice. China identify their mobiles service into two different offering: Downstream Activities Software Developer Basic telecommunication services. Value added telecommunication services. Network Services Included in this categories were, wireless Key Learning (Access) value added services e.g. SMS,MMS, Mobiles Games. • Foreign Involvement In Mobile Data Services. – As China accession into WTO in 2001, for the Focus Mobile Data Services value added sectors, foreign ownership was capped 50% on “accumulated basis for Area (Content) investment”. – WTO Agreement does not cover game developer which currently need to be 100% owned by local. • Availability of 3G licenses by 2009 – By 2009, all four major Chinese telecom operators – China Mobile, China Unicom, China Telecom and China Netcom.1. Lam, Michelle, A Value Chain Study Of China’s Mobile Industry (Tekes. • Unbalanced of development December 2003) p:16 – Exist unbalance development in China, National Penetration rate is 19.5% but in Beijing over 70%. • China Mobile controlled 65% of the China mobiles market with total subscribers amounting to 360 Risk Stage million (as Dec 2007). Market entrant had to certain extent dictated by China Mobile.
Mobile Gaming and Online Market In China Will Depend On Selecting The RightPartner and Audiences As China Accession To IPTV On The Introduction Of 3GService by April 2008. Mobile Game Revenue Online Gamer Demographic Matrix (in $ Million)6 For China Market8 65200 $60,300 Age Group Gender $50,300 • Below 30 years old • 41.7% of all gamer $40,300 with relatively are women. $30,300 higher education and $20,300 income. 14700 $10,300 • From this group, 4258 $300 298 923 31.3% between 18-25 2008 2004 2005 2006 2007 and 19.7% between• “IDC Predict Steady Growth in China’s Online Gaming Market Over The Next 5 Years” 26 and 30. Computerworld Malaysia 12(12), 21 April-11May 2006; available from http://www.computerworld.com.my/printerFriendly.aspx?articleid=536&pubid=4&issueid=90 $ Spending Other profile Market Player Based on Revenue • Single represent • 50% of online game (In $ Million)7 dominant group of were professional online gamer with 20% 10.6% are those with 50% 13% a monthly income of more than USD400. 11% Shanda Giant The9 60% Perfect World 1. Entertainment Asia,”Survey Show Mainland’s Online Gamers are Others Mainly Singles With Higher Income”, available at 1. RedlineChina,”Games Market In China Up 60% in 2007 to $1.66 billion”, available from http://www.entertainmentasia.com/news_detail.php?ct=1002&nid=894 http://redlinechina.com/main/?q=node/745; accessed on 28 April 2008 accessed on 19 April 2008.
China Mobile Games Industry Focus On W-VAS Content Delivery. Device • Content Provider Manufacturer – Provide content to (Equipment Monternet/Uni-Info Provider) – Provide development platform by collaborating with Terminal Provider. – Provide content to Service Key Learning Provider Publisher • Consumer (Service Carrier Consumer – Get the mobile phone from Provider) terminal provider. – Subscribe for mobile service from the carrier. • Device Manufacturer – Provide all the equipments to Monternet / carrier. Uni-Info • Monternet, operated by China Mobile • Uni-Info, operated by China Unicom. • China Mobile require that all games Stage Risk need to be submitted to Monternet before it can be approve. Developer Porting Service • Approval process can take up tp 6 (Content (Terminal month. Provider) Provider)
W-VAS Content Delivery Business Model mirror NTTDoCoMo’s businessmodel and revenue sharing principal.9 • Content Delivery (1A and 1B) – Service provider provide content to Monternet/Uni-Info. – The available content (on-deck 4 selection) then offered to the consumer. • Consumer (2) Key Learning – Get the monthly statement from Publisher 3 2 their carrier. (Service Carrier Consumer – Made 100% payment to the Provider) carrier. • Revenue sharing (3) 5 – China Mobile take 91% or 85%. 1A – China Unicom take 90% or 10%. 1B • Off-deck alternative. Monternet / – On occasion, if consumer get Uni-Info content direct from the service provider, consumer will be direct. • China Mobile require that all games Stage Risk1. Juniper Research, “China – The 3G Opportunity” Hampshire, UK, 2007 p:6. need to be submitted to Monternet before it can be approve. • Approval process can take up tp 6 month. Sources: Juniper Research.
China Mobile Games Development Platform Use Similar DevelopmentPlatform As In The US. Platform Characteristic Devices J2ME (Java-based) • Enables Java-based games to be played on mobile phones and PDAs Nokia Series 40 and 60 Devices • Allow mobile device makers, wireless carriers, and enterprise to N-Gage quickly develop, install, and run new games on wireless networks. Motorola T720 • Widely accepted standard that works with multiple platforms • Improves graphic and multimedia capabilities to suit mobile devices. BREW (C-based) • Optimize memory allocation, making suitable for mobile devices Motorola T720 with limited resources. Samsung A530 • Support game operators with such capabilites as secure over-the- Samsung A610 air distribution of applications, billing and payment, and service monitoring and support. • Allow games to be played more quickly because it runs on C rather than Java Mophun (C-based) • Enables rich gaming experience with advanced 3D graphics, Sony Ericcson enhanced audio, and multiplayer capabilites. Motorola N-Gage ExEn (Java-based) •Provide good graphical capabilities and fast processing speeds Philip •Enables additional game-development capabilities (such as sprite Alcatel zooming, parallax scrolling, ray casting, and rotations) Mitsubishi Panasonic 1. O.B.Soh, Jason, and C.Y. Tan, Bernard; Mobile Gaming, Communication of The ACM, March 2008 (Vol 51-3). Notes: 1. Both Monternet and Uni-Info had been notably accepted both Java and C-based development platform.
New Market Entrant To China Need To Follow The On-deck Approach. • Market Entrant Alternative – Directly through the carrier. Content Provider can choose either to partner with China Mobile or Chi Key Launching Strategies Unicom. – Through Monternet Operator does the delivery, billing and revenue collection. Content provider focuses on marketing, content production and brand creation. Publisher • Have a local presence (Service Carrier Consumer – On Dec 17, 2007 joint regulation from Provider) MII/SARFT stating that video download services must from now on be state- controlled, it is aimed at both Internet and Mobile Internet content providers. – Establish a local business and technology team controlled by your “own-man”. Monternet / Developer Uni-Info (Content • China Mobile require that all games need to be submitted to Monternet before it can be Provider) approve. Stage Risk • Approval process can take up tp 6 month. • Collecting the cash and getting money out of China can be difficult. • Protecting your IP right can be extremely difficult. • Competition companies is about 800 companies.
Success Cases Of Entrant To China Mobile Gaming Market – Australian BasedCompany1 Focused On Mobile Sport Games Based On Java Platform.10 • Market Entrant Alternative – Through Monternet The company makes strategic alliance with local ISP provider in this case Monternet. Key Launching Strategies • Have a local presence – Top management transferred from Sydney to Beijing. – Establish a local business and technology team controlled by your “own-man”. Publisher • Protect IP right (Service Carrier Consumer – Makes agreement with China basketball Provider) superstar to gain exclusive right for content related to him. • Retain money and re-use for expansion – The company used back the fund generated from the operation to expand their operation without taking the money out. Monternet / Developer Uni-Info (Content • China Mobile require that all games need to be submitted to Monternet before it can be Risk Stage Provider) approve. • Approval process can take up tp 6 month. 1. Siponmaa, Ari. “How To Fail and How To Succeed in China”, available from http://websrv1.tekes.fi:8080/opencms/opencms/OhjelmaPortaali/Kaynnissa/NETS/fi/Dokumenttiarkisto/Viestinta_ja_aktivointi/Seminaarit/Kiina_mobiili/Mobile ; accessed 20 April 2008Notes:1. The Company wants to remains anonymous.