Lo­cal­iza­tion and cus­tomiza­tion mark gam­ing ma­jor Per­fect World’s con­tin­u­ing ex­pan­sion world­wide

China Daily (Hong Kong) - - BUSINESS - By OUYANG SHIJIA ouyang­shi­jia@ chi­nadaily.com.cn

Shen­zhen-listed Per­fect World Co Ltd, a Chi­nese movie and gam­ing com­pany, is tar­get­ing over­seas mar­kets as on­line gam­ing and e-sports ap­pear set to boom.

China has al­ready over­taken the United States as the world’s largest gam­ing mar­ket

he US games mar­ket was said to be worth $23.6 bil­lion last year, with 179 mil­lion gam­ing play­ers, ac­cord­ing to New­zoo, a gam­ing mar­ket in­tel­li­gence provider head­quar­tered in Am­s­ter­dam.

But China’s games mar­ket was worth $24.3 bil­lion last year with 566 mil­lion gam­ing play­ers who spend big money to in­dulge in their pas­sion.

And for­ward-think­ing in­vestors and gam­ing com­pa­nies such as Per­fect World are bet­ting big on the emerg­ing mar­ket be­com­ing pop­u­lar glob­ally.

Ever since Per­fect World launched its first over­seas sub­sidiary in the US in 2008, its global busi­ness has been a ru­n­away suc­cess.

Dur­ing the past decade, it has been one of the largest game ex­porters in China, ac­count­ing for 40 per­cent of the to­tal at its peak.

The Bei­jing-based com­pany re­ported in March that its rev­enue for 2016 rose over 25 per­cent to 6.15 bil­lion yuan ($903 mil­lion), of which 4.7 bil­lion yuan was from the gam­ing sec­tor.

The com­pany said 20 per­cent of to­tal rev­enue last year was made mainly from over­seas PC and con­sole gam­ing mar­kets. The fig­ure is ex­pected to grow to 40 per­cent in the next ten years.

“We aim to turn into an in­flu­en­tial player glob­ally,” said Xiao Hong, CEO of Per­fect World. “We be­lieve the US mar­ket is one in­di­ca­tor to show the fu­ture trend.”

New­zoo said con­sole gam­ing is the largest seg­ment in the US gam­ing mar­ket with $11.4 bil­lion in rev­enue last year. The US PC mar­ket gen­er­ated $5.4 bil­lion and the mo­bile games mar­ket $6.8 bil­lion.

“The PC and con­sole gam­ing mar­kets are big in the US and Eu­rope. Gain­ing a foothold in those ma­ture mar­kets will ex­pand our pres­ence in the global mar­ket,” Xiao said.

So far, the on­line mul­ti­player games pub­lisher has un­veiled more than 20 pop­u­lar ti­tles in­clud­ing Nev­er­win­ter and Star TrekOn­line in over­seas mar­kets. It has over 20 branches in both do­mes­tic and over­seas mar­kets, such as South Korea, Ja­pan and the Nether­lands.

Per­fect World wants to ex­pand to more mar­kets, just like Chi­nese video game giants Ten­cent Hold­ings Ltd and NetEase Inc had done. It is tar­get­ing coun­tries and re­gions par­tic­i­pat­ing in the Belt and Road Ini­tia­tive, es­pe­cially South­east Asia, which is home to more than 2 mil­lion gam­ing play­ers.

The com­pany has launched a mo­bile game called the Heav­enS­wor­dandDragon Saber in Sin­ga­pore, Malaysia, Viet­nam and Thai­land last year. It is set to in­tro­duce a new one in Sin­ga­pore and Malaysia this month.

Xiao said the com­pany was also look­ing not just to ex­pand in­ter­na­tion­ally but to fo­cus on fa­cil­i­tat­ing lo­cal­iza­tion in over­seas mar­kets. “We’ ll fur- ther de­velop the over­seas mar­ket. Af­ter mak­ing key in­roads into the US mar­ket via PC and con­sole games, we’ ll seek more op­por­tu­ni­ties in the Belt and Road mar­kets.”

A re­port re­leased in Jan­uary by New­zoo high­lights South­east Asia as a fast-grow­ing re­gion by rev­enues earned by mo­bile game com­pa­nies.

New­zoo fore­casts mo­bile game mar­kets will see a com­pound an­nual growth rate of over 40 per­cent be­tween 2015 and 2019, driven by grow­ing in­ter­net and smart­phone pen- etra­tion as well as a rise in dis­pos­able in­come.

Ac­cord­ing to the re­port, mo­bile gam­ing rev­enues in the re­gion are ex­pected to come in at $1.4 bil­lion for last year, and reach $3.9 bil­lion by 2019.

Dong Zhen, an an­a­lyst at Bei­jing-based con­sul­tancy Analysys, said as sat­u­ra­tion lev­els in­crease in the Chi­nese gam­ing sec­tor, and com­pe­ti­tion gets fiercer, more and more gam­ing com­pa­nies are dis­cov­er­ing new av­enues for growth in global mar­kets.

“With the ever-grow­ing global de­mand, gam­ing de­vel­op­ers are no longer con­tained at home with lit­tle in­ter­na­tional ap­peal. How­ever, the cul­tural dif­fer­ences and the un­even de­vel­op­ment in dif­fer­ent re­gions are big chal­lenges that Chi­nese en­ter­prises need to face.”

Per­fect World is no ex­cep­tion. To cope with the chal­lenges, the com­pany hires lo­cal em­ploy­ees and ex­ec­u­tives to man­age its over­seas sub­sidiaries. At its US branch, only the gen­eral man­ager is from China, and over 300 other em­ploy­ees are lo­cals.

Xiao said: “We need to lo­cal­ize our over­seas busi­ness to deal with prob­lems as the lo­cals do. Sim­ply of­fer­ing China-made games can­not guar­an­tee sus­tain­able growth. Only by cater­ing to the lo­cal con­sumers’ needs, we’re able to of­fer bet­ter cus­tomer ser­vices.

“En­ter­ing a new phase of global re­sources in­te­gra­tion, we hope one day we can com­bine world­wide tal­ents and take each side’s good parts to build a world-class prod­uct, al­low­ing more peo­ple to have bet­ter ac­cess to the ori­en­tal cul­ture.”

of the OG team (in white robes) takes part in the DOTA2 Asia Cham­pi­onships in Shang­hai in early April.

Ama­zon is not the only com­pany bet­ting big on e-book read­ers in China. Bei­jing-based iReader Tech­nol­ogy Co Ltd re­leased its lat­est e-book reader called the iReader Light in early Septem­ber last year. The de­vice weighs only 142 grams, and is priced 658 yuan.

Cheng Xiangjun, CEO of iReader Tech­nol­ogy, said more than 100 mil­lion peo­ple across 150 coun­tries use the iReader to read e-books each month.

On­line shop­ping ma­jor JD.com Inc launched its JDRead last year. Priced 769 yuan, the JDRead de­vice can ac­cess about 300,000 e-books.

The hard­ware seg­ment has grown for sure, and the soft­ware seg­ment, or e-books/con­tent, ap­pears set to fol­low suit.

“We find Chi­nese users re­fer to the dic­tionary a lot. Es­pe­cially their use of the English dic­tionary is higher than in any other coun­tries, so we specif­i­cally de­signed a func­tion of tips about new words, and pro­vide Englishto-Chi­nese/English def­i­ni­tion au­to­mat­i­cally for Chi­nese read­ers,” Aitken said.

Ama­zon, he said, will launch more new func­tions over the next year.

Com­pared with printed books, the cost of e-books is very low. In fact, some of the e-books are free of charge or cost just a few dol­lars.

For in­stance, the printed ver­sion of TheShort­estHis­to­ry­ofEurope, one of the top five best­sellers in 2016, is priced 25 yuan, while its e-book ver­sion re­tails for only 2.99 yuan.

To be sure, e-books ac­count for only a small per­cent of the whole pub­lish­ing in­dus­try. Sales of printed books reached 62.4 bil­lion yuan in 2015, while rev­enue from e-books was 10.8 bil­lion yuan, or 15 per­cent of the to­tal, ac­cord­ing to a book re­tail mar­ket re­port.

That sug­gests the po­ten­tial for growth is im­mense. So, to make more e-books avail­able to de­vice buy­ers, Ama­zon in­tro­duced the Kin­dle Un­lim­ited e-book monthly sub­scrip­tion ser­vice in Fe­bru­ary 2016 in China.

The ser­vice costs each user 12 yuan each month and al­lows users to ac­cess and read over 67,000 Chi­nese and for­eign e-books on their de­vices.

Ama­zon has also forged part­ner­ships with more than 660 pub­lish­ers in China such as CITIC Press Group, Com­mer­cial Press, China Ma­chine Press, For­eign Lan­guage Teach­ing and Re­search Press and Changjiang Chil­dren’s Press.

More than hard­ware

There is more to the dig­i­tal pub­lish­ing in­dus­try in China than just hard­ware and soft­ware.

Elaine Chang, vice-pres­i­dent of Ama­zon, said male users out­num­ber fe­male users in China, and all of them are younger.

In this re­spect, the China mar­ket is dif­fer­ent from the US mar­ket where 70 per­cent of users are fe­male and older.

A re­port from the China Au­dio-Video and Dig­i­tal Pub­lish­ing As­so­ci­a­tion showed the post-’70s gen­er­a­tion love his­tor­i­cal bi­ogra­phies, while the post-’80s and post-’90s gen­er­a­tion are will­ing to read ro­man­tic sto­ries, while the post-’00 gen­er­a­tion pre­fer mod­ern me­trop­o­lis sto­ries.

An­a­lysts said whether or not dig­i­tal book sales would see sig­nif­i­cant growth de­pends on the range of con­tent on of­fer in the mar­ket, not just the fea­tures of a de­vice.

So, the em­pha­sis should be as much on tech­nol­ogy as nur­tur­ing more au­thors and orig­i­nal lit­er­a­ture, they said.

Huang Guofeng, an an­a­lyst with Bei­jing-based con­sul­tancy Anal­y­sis, said, “China’s dig­i­tal book and e-reader mar­ket shows huge growth po­ten­tial.”

Bruce Aitken, vice-pres­i­dent of Ama­zon China

PRO­VIDED TO CHINA DAILY

A pro­fes­sional DOTA2 player

PRO­VIDED TO CHINA DAILY

Known by the alias Mir­a­cle-, Amer Al-Barkawi of the Liq­uid team plays DOTA2 at the DOTA2 Asia Cham­pi­onships in Shang­hai in early April.

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