The world’s biggest gaming market banned new games from entering the market starting March of 2018. China stopped approving games amid a regulatory overhaul triggered by growing criticism of games for being violent and allegations that they were causing myopia as well as addiction among young users.
Just recently, however, that changed.
In December, China decided to approve the release of 80 new games after months of no action. Now that the Chinese government has lifted its ban on new gaming releases, gaming app developers are chomping at the bit to launch their new mobile gaming apps on Chinese app stores.
The Chinese mobile opportunity
Vast opportunities are on the horizon as approvals begin to flow again.
China accounts for one out of every four US dollars generated globally from mobile games. The revenue generated by apps in China in 2017 is an estimated $35 billion USD, and app downloads from Chinese Android stores are expected to reach almost $90 billion by the end of this year. Additionally, according to the China Internet Network Information Center (CNNIC), the country’s internet user base now stands at around 772 million, 97% of whom are smartphone users.
This is one massive dragon of an addressable market.
But as a rule, China’s licensing system requires that foreign publishers obtain government approval that often involves a complex process before releasing their games on one of the country’s app stores. This process can take months and has had a significant impact on some (but not all) foreign publishers, deterring some from launching locally. One consequence of the increasingly challenging regulatory environment: at the time of the complete ban, foreign developed games accounted for only 25% of the top 250 mobile game downloads on China’s App Store. That could start to change as approvals are starting to flow again.
With China’s recent reversal in attitude and policy, the tide appears to be turning for non-domestic publishers. 2019 and beyond looks promising for game developers who wish to tap into the Chinese market.
Here are a few important things to know before entering the market.
Complex app store landscape
While the Apple App Store lives very successfully within the great firewall, Google Play is strictly blocked, along with the rest of Google’s services. Instead there are over 400 Chinese alternative app stores where you upload your product for review.
The major ones are often owned by China’s biggest tech companies. For instance, Tencent, Baidu, Huawei, Vivo, China Mobile, and Oppo run major Android app stores. Of course, every store has its own terms and conditions, as well as specific requirements.
In recent years, some of the top handset manufacturers came together to form an alliance to standardize some of the app development and publishing features between app stores.It’s still early to determine how effective this will be.
Different advertising channels
With so many foreign internet services and apps blocked by the great Chinese “firewall” including Google, Facebook, Instagram, one of the key things that advertisers need to be aware of is that the advertising ecosystem in China is extremely different.
Ad channels and ad networks that have worked well for them in other markets may not necessarily render the same results in the Chinese market. In many cases, they may not even exist in China at all.
One way we can help: Singular houses the largest database of global advertising performance data and has successfully helped marketers to identify and work with the most effective ad channels globally, as well as in China.
(If you would like to speak to one of our in-house client success consultants, we would happy to share our list of top performing ad channels in China.)
Culture, language, and UX
Chinese culture, language, governance, and mobile user habits are very different from the rest of the world. While the world’s average smartphone user has around 80 apps on their phone, in China users have over 100 … including and especially WeChat, the top social media app with over 200 million daily active users. WeChat has over a million mini-apps … including payments, services, stores, and just about anything else that run within WeChat.
This unique climate means that simple translation won’t suffice, and more complex redesign is often required.
Working with a local developer and translator is highly recommended, and success in China often means re-inventing your game or app for Chinese preferences and habits. Chinese customers typically shun apps which appear translated, so it’s important to make the app look as if it were made in China.
In China, most paid and subscription-based apps don’t generate revenue, as free unofficial versions are readily available. This has led to the majority of companies monetizing apps through ads. Interstitial ads are one of the most popular methods of app monetization, with nearly all of the most prominent local apps implementing them to promote in-app purchases and other relevant products.
Banner ads and video ads are also prevalent. One challenge: as a large and populous country, China has many different dialects, which app publishers have to remember as they localize their apps.
Thanks in part to the proliferation of app stores, APK fraud is a challenge. Scammers grab the source code for your app or game, change it slightly and add their own monetization. Then they simply re-upload it to multiple app stores as their own, and benefit from an ad revenue stream, or in-app purchases.
Overall, the Chinese internet and mobile ecosystem is probably the most complex in the world. But since it is also the biggest in terms of consumer app spending, the rewards for getting it right can be massive.
Singular has helped top global advertisers to successfully enter the China market.
We welcome you to reach out to speak to one of our in-house experts on the Chinese market and share more in-depth learnings for entering the market successfully.