In the beginning of September 2016 when we assisted the Millennial 20/20 summit in Singapore, we got a chance to interview Devin Nambiar from leading publisher of games Electronic Arts, and learn more about the gaming scene in Asia. In our conversation, Devin touched on some major themes in regard to the APAC markets (China, Japan, Korea, and Southeast Asia):
China is a very complex environment for gaming
Today in China, developers have understood that the power of content creation and distribution is no longer in the hands of the government, but of big companies like Tencent, China’s biggest Internet service portal.
Indeed, Tencent controls a large piece of the Chinese video game market. China’s three most popular PC games – League of Legends, Dungeon and Fighter, and Crossfire – are all distributed and operated by Tencent. Recently in June 2016, Tencent acquired the highly successful mobile game studio Supercell, which is behind the global hits Clash of Clans and Clash Royale, for US$8.9 billion.
NetEase also has enormous strength in game development and publishing, operating China’s top mobile titles like Fantasy Westward Journey, and partnering with Blizzard Entertainment to publish its hit games.
Hence, for Chinese developers to get their app in the ecosystem, they have to partner with companies like this. The gaming scene is much more controlled by the publishers and channels than the developers.
41% of the games today in China are played on mobile. However, Google and Facebook are blocked, and the Android app ecosystem is segmented into several different App Stores, making app distribution very complex.
China is set to be the largest market for gaming in the world by 2019, and Chinese are top spenders when it comes to games. They play to win, and paying money can help them grow stronger characters and climb leaderboards so they pay to train their characters, win events, and overall be the best.
South Korea has some overlap with China, while Japan is its own distinct market
Japanese and Korean players are also willing to pay, but for slightly different reasons. Korean players, for example, want to feel they are talented. So they will spend more time on games to learn and perfect their skills. In Japan, players care about character development and storyline, so they will spend time to observe the character development and spend money to increase their characters’ skills.
The most successful games in these markets are collectible card games (CCG) and RPGs, because you can train your characters and battle. The games sometimes enable you to battle in real-time, which creates a more hardcore experience, and makes it all the more important for the player to be skilled. The Korean market is moving more toward synchronous MMORPG style games that mimic PC experiences, while Japan is still focused on character development & storyline often with voice-overs, and training/growing your character.
When it comes to publishing your app, messaging apps like KakaoTalk and LINE are important, as they also serve as a publisher for games in Korea and Japan respectively. LINE isn’t used in Korea but Naver, the company that develops LINE, has risen to become a competing publishing platform to Kakao, with titles like Raven showing great success.
While partnering with Kakao used to be essential in Korea, today, more and more developers are able to launch games on their own, or on different platforms like Naver.
South East Asia is bridging the gap between Asia and the West
What is happening in South East Asia is actually a projection of how the gaming scene is going to evolve in the coming years. A lot of developers are slowly moving out of their regions, and more and more games have two audiences: Asia and the West.
Asian developers are gaining market share in Europe and the US, and western players are increasingly adapted into more skill-based games with deeper systems. ELEX is a great example of a Chinese company that has been experiencing great success in the west with its title Clash of Kings.
Looking to the future
The ecosystem of gaming is increasingly shifting towards mobile, with mobile device penetration increasing in several developing APAC regions like Southeast Asia and India. While Android has more users, iOS has recently surpassed it as the leading platform for overall revenue generation. The Android/iOS platform war will be interesting to watch over the next few years.
Moreover, in mobile, player purchasing behavior is critical information for developers who track player data and use data science to inform new feature and game development. This data gives a lot of information not only for product strategy, but also for helping to upsell the player by predicting what (s)he would want to spend money on. Data Science will only become more critical in gaming as time goes on.
When it comes to applying VR in games, however, Devin believes it is still a few years off, and that mobile VR is even further off. “When we will be able to monetize VR games, then it will democratize effectively. Today, there isn’t enough content development for VR, hence buying a headset is useless as it will be outdated in a few years, once the content pipeline has caught up,” says Devin. The industry isn’t mature enough to embrace this technology.
But Devin recognizes a growing trend when it comes to merging the physical world with the virtual one. The successes of PokemonGo or eSports competitions with thousands of people in the audience reinforce this tendency and provide exciting opportunities for the industry to grow and merge physical and digital experiences.