China's Social Game Developers Look Abroad
Tencent Tech, 4/12/10
A number of Chinese social game developers are reportedly considering shifting their business overseas in the face of developmental difficulties in China.
Zhang Wei, CEO of social game developer Boyaa Interactive, said that Chinese social game developers are struggling to survive. Boyaa is seeing poor revenue despite having social games on Kaixin001, Renren, MySpace.cn, 51.com and Baidu's (Nasdaq: BIDU) gaming platform. Boyaa's game Kaixin Baobei is ranked in the top five games on Renren, but still earns Boyaa only tens of thousands of RMB a month, at best.
One anonymous industry source said the biggest problem isn't the size of the revenue share received by developers, but rather a lack of transparency regarding total revenue on the part of SNS platforms.
Another reason that social game developers are reportedly looking overseas is that domestic gamers are reluctant to pay any gaming fees. Overseas SNS platforms have comparatively more attractive revenue sharing systems. Jia Shen, co-founder of social game network operator Rockyou, recently disclosed that Rockyou's games are ranked among the top ten on Facebook, bringing in tens of millions of USD each quarter.
Rockyou is not only a game developer but also global game publisher. Rockyou plans to partner with domestic game developers to help distribute their games worldwide in exchange for a commission. Myspace.cn has announced its first annual social game competition in order to attract top games and developers. Winners will be recommended to global site Myspace.com.
Domestic SNS websites are also attempting to attract game developers. Shen Boyang, VP of Beijing-based holding company Oak Pacific Interactive, appealed to developers to pursue success domestically before entering overseas markets, rather than attempt to "get rich quick." Shen pointed out that Renren's API is similar to Facebook's, and Renren can provide assistance, funding and promotion to developers that start out on Renren's platform. Renren splits revenues 60:40 with developers. Shen also said that on Facebook, developers must also place advertisements on the platform, which means they might not necessarily make a profit. Shen added that major MMORPG and browser game developers are entering the market, and domestic social game developers that go abroad may return to find they've lost their share of the market.
Comsenz CEO Dai Zhikang said that given that there are hundreds of thousands of applications on Facebook, domestic developers' products will be lost in the crowd without advertising, expenses for which can reach more than 50% of revenues. Dai said he hopes developers will launch products domestically first, during which Comsenz will assist with debugging and operations; later, developers can release a more tested product overseas.
Zhang Wei of Boyaa said that overseas development is difficult, pointing out that Boyaa spent three months establishing overseas payment channels, the process for which was extremely complicated, and that the firm has gone through over RMB 1 mln so far, but has not yet seen any returns.
Keywords: Boyaa Shen Boyang Dai Zhikang Zhang Wei Internet overseas Comsenz Facebook SNS Oak Pacific Renren Rockyou social game Jia Shen online gaming
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