Mobile gaming taking China by storm

July 8, 2013 Leave a comment

Mobile gaming taking China by storm

Staff Reporter

2013-07-08

Backed by huge numbers of mobile phone subscribers, the gaming industry in China has been growing by leaps and bounds to develop into a major industry. According to figures released on July 3 by Tencent, China’s largest internet company by value, the number of registered game software developers in the country topped 80,000 as of April, with the number of registered game applications exceeding 40,000. The number of games racking up over 100,000 yuan (US$16,300) in monthly revenue also jumped by 65% year-on-year. While a game created by Tencent called Plants vs Zombies, launched in May last year, accumulated over 80 million yuan (US$13 million) in revenue as of June this year.Numerous firms are scrambling to tap into the expanding market including some which have teamed up with foreign partners. On June 28, Giant Interactive Group signed an agreement with Ntree4v, a Korean game software developer, in Shanghai to cooperate in the R&D and marketing of mobile game products, with the first cooperative product Project Panda scheduled to hit the Chinese market in August. Peng Cheng, vice president of Giant Interactive, said that the company has sunk tens of millions of yuan into Project Panda, adding that four other mobile games will be rolled out by the end of the year.

The gaming craze has fueled stock prices of game developers, with stock price of Chinese game maker Ourpalm, soaring by 200% so far this year. The lucrative business is attracting the attention of firms outside the gaming industry, such as Datang Telecom and film production company Huayi Brothers reported to be planning to invest in mobile gaming firms.

According to iiMedia, an industry research body, the number of mobile game subscribers in China reached 286 million as of last year, up 62.5% year-on-year, including 47.9 million mobile phone online game subscribers, up 65.7% than a year earlier. Last year, the scale of the domestic mobile gaming market leapt by 79% to 5.9 billion yuan (US$962 million).

Song Wei, secretary general of the Beijing-based Global Mobile Game Confederation, said that mobile games are increasingly popular in the mobile internet age as they are extremely profitable. While numerous players including mobile communications carriers, game developers, and game service providers, are striving to carve out their share.

Game developers often have weaker clout in dealing with gaming service providers, which own game marketing channels and platforms, due to the huge number of the former. After deducting operating costs, what is left for game developers is often meager but the share of revenue for game developers can reach 70% at the platforms of Apple and some large mobile communications carriers.

Filed under TMT Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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