Social Gaming: How China became the games industry of the world

It was recently announced that the games company Zynga, most famous for Farmville, has donated an undisclosed amount to the University of Southern California (USC) so that courses in social mobile gaming can be developed. The university gets to access best practice from leading industry practitioners and companies like Zynga can influence how students learn about producing better social mobile games.

This is an interesting move from a company that is already known for their innovation in social mobile gaming. But it may also be a wise long-term move as a recent report from CNBC noted that the Chinese developers are moving west. Games sales hit $7.7bn in April, which was down on the previous month, but compared to last year this is a 9 per cent increase – and companies like Tencent want a bigger piece of that action.

Tencent is mainly known for their social app WeChat. In China it’s more like a public utility than just an app because it combines messaging with social and payment functions. It’s like rolling WhatsApp, Twitter, and Apple Pay into a single app. However, the Tencent game ‘Honour of Kings’ was the 7th highest grossing mobile game in April and analysts expect more from China.

In fact, Bloomberg recently declared China to be the games industry capital of the world and it is social mobile gaming that is leading the charge. In 2012 China accounted for 3% of games sales on the Apple App Store, last year China’s share was up to 31%. Analysts estimate that gaming revenues will be a total of $109bn this year with 42% coming from mobile titles. By 2020 it is expected that the majority of gaming revenues will be from mobile titles.

Speaking to Bloomberg Ilkka Paananen, the chief executive officer Supercell, the developer of the popular Clash of Clans mobile game, said:

“Games have become truly mass market and it’s a massive, massive opportunity that’s only going to get bigger. One of these days somebody’s going to build a game that reaches a billion users a month.”

70% of all international games company acquisitions in the past year have been made by Chinese companies, which indicates that China is about to become a much bigger player in the global games industry, especially in mobile games. But this also creates an enormous opportunity for games creators to reach gamers inside China. At present 93% of revenue coming from Chinese gamers goes to Chinese game creators, but with more international acquisitions this could change quickly.

At present 93% of revenue coming from Chinese gamers goes to Chinese game creators

One thing is clear though, mobile gaming is about to become the biggest sector in the entire industry. Smart companies will not only be exploring new titles, they will be expanding into new markets, and China is the biggest market of them all.

What do you think about the development of social mobile gaming and the importance of China to this sector? Leave a comment here.

Guest post by Garrett J. Kenny

Garrett J. Kenny is the Global Business Development Executive and Founder Games Europe CX Guild.

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One Thought to “Social Gaming: How China became the games industry of the world”

  1. I think moving into the future, China will play a more important role in all sectors of industry and entertainment. We’re already seeing this happen clearly with how Hollywood is changing to accomodate the influx of Chinese viewership, putting in Chinese product placements and co-producing with Chinese studios.

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