The rapid increase in the number of developers globally on iOS, Chongqing Massage Network, has led to higher quality thresholds for games and a sharp rise in promotion and labor costs, creating significant survival challenges for small teams venturing into game development.
Gao Feng.com Senior Vice President Peng Li told reporters that compared to the limited Chinese market, overseas markets have much larger user bases and better payment habits, generating revenue at least 6 to 10 times that of the Chinese market. Domestically, people are accustomed to pirated hardware and free software, with most unwilling to spend money on applications. The low payment rate makes the domestic mobile gaming market appear promising but somewhat bleak, forcing developers to focus primarily on overseas markets.
The widespread adoption of smartphones and tablet home computers has made "Angry Birds," "Plants vs. Zombies," and "Fruit Ninja" household names, with their respective companies gaining fame and fortune. Industry insiders generally believe that mobile games will achieve a status comparable to PC games in the future, with a bright market outlook.
Peng Li stated that currently, various platforms offer a range of development tools and cooperation models. Entrepreneurs do not need to consider building everything from scratch or creating large and comprehensive systems right from the start. Instead, they should make full use of existing tools and technical support to develop more distinctive products in less time. Then, through various cooperation models, they can expand the product's influence and user base to quickly transition out of the startup phase and enter a stable operation stage.
Chen Bangding, General Manager of the 9th City (Weibo), told reporters from the China Business News that with the spread of smart devices, the domestic mobile gaming market in China has a bright future. From 2003 to 2011, the annual compound growth rate of China's mobile gaming market size was 147.90%. Domestic analyst Sun Mengnuo expressed that by the end of 2012, the scale of China's mobile gaming market is expected to reach approximately 6.2 billion RMB.
As a portable terminal that follows users 24 hours a day, the smartphone carries a large amount of fragmented user time. Based on the ownership of smartphones, its gaming market has over one billion potential users.
Despite the rapid expansion of the market, Chinese companies still cannot escape the fate of being more successful abroad than at home, largely relying on overseas markets for profit.
Editor's note/ As a terminal that operates 24 hours a day and follows users, the smartphone has become a must-contend battleground for merchants developing various applications. The popularization of smartphones and 3G networks has further expanded the commercial allure of mobile internet. According to the 2011 Annual Report on China's Gaming Industry released at the 2011 Annual Conference of China's Gaming Industry, with the popularization of smart communication terminals and the rise of mobile internet applications, the mobile online gaming market achieved a theoretical sales volume of 1.7 billion RMB in 2011, with a year-on-year growth rate reaching 86.8%. It is estimated that this figure will reach 7.5 billion RMB by 2016. However, the user payment habits in China still need to be formed, and giants from PC-end gaming are entering the market, raising questions about opportunities for small and medium-sized enterprises. This issue presents a special reading on mobile gaming market opportunities.
With the increasing quality threshold for games and the sharp rise in promotion and labor costs, small teams venturing into game development face significant survival challenges.
Therefore, game giants and entrepreneurs are rushing into the mobile gaming industry. What is different is that game giants are beginning to lay out platform-based strategies, while small and medium-sized entrepreneurs are struggling like a single leaf in rough waters. In the future, the mobile gaming market will be a battleground for major players, leaving fewer opportunities for small and medium-sized entrepreneurs.
All pure
Undoubtedly, such a lucrative market will attract countless gold diggers. Chongqing Silk Stockings Massage. Founder Haozhi Gu (Weibo) (CEO of Touch Technology) of the CocoaChina Apple Developer Community told reporters that there are currently around 100,000 developers, including part-timers, on the iOS platform, but the growth rate of the developer market far exceeds the expansion of the market size. Domestic teams' income is now rising overall, but individual company income levels are not as good as in the first half of 2011.
Besides game giants, a batch of social game developers have also entered the market, such as Qijuzhongwu, Youyuanyin, and Hanguku. CEO Xianshu Yi of Qijuzhongwu, which has experience in overseas operations and social game development, said that they began trying out several mobile social games in the Japanese market for trial operations since September 2010 and will gradually increase the proportion of mobile game development.
The rapid entry of major players has accelerated industry reshuffling. Industry insiders generally believe that 2012 will be a year of major reshuffles, with many small teams shutting down or being acquired by larger companies due to their inability to achieve profitability or secure financing.
Overseas markets become the second battlefield for making money.
Breakthrough for small teams
Competition has already intensified. Wu Rou, CEO of Wanshi, stated that due to the saturation and decline of domestic PC-end gaming and web gaming markets, the booming mobile gaming competition has become increasingly fierce. Major gaming companies have all launched mobile gaming businesses. In the second half of 2012, these companies' products will be launched one after another, competing for an already limited market.
Currently, there are several revenue models for Apple App developers: 1) revenue sharing from paid apps; 2) free apps with embedded advertisements inside the app, earning revenue through clicks; 3) in-app purchases, such as purchasing tools within the app. Jiang Fan, CEO of Dianmeng, indicated that in the future domestic market, app fees and upfront payments (in-app purchases through virtual items, etc.) will become the main profit methods for mobile games.
Re-selecting game genres might bring new opportunities for startups. Peng Li pointed out, "Currently, due to the piracy issue domestically, the revenue space for dual-machine games is not large, but the profitability of Android online games remains quite good. In the future, if developers want to achieve continuous profit income, they need to invest more in the development of online games."
Game development on the iOS platform has moved from an early period where creativity brought infinite vitality to an era where major players compete in terms of capital, channels, and operational capabilities.
Xu Zichu's four-person game development team at Hangzhou Coolpush Game Studio focuses on iOS platform mobile game development but has seen no income for months. Xu Zichu frankly stated: For small teams, the biggest challenge is funding and personnel. Spending money on promotions may result in your product getting lost among 400,000 other apps even if it is not well done. High-quality talent is what keeps entrepreneurial teams behind.
Established game giants have begun to occupy the market with multi-faceted resources. An industry insider revealed that Tencent had cut multiple web game projects in the second quarter of 2011 but increased investment in iOS platform games. Shen Guoding also stated: "Now, the wired internet strategy of the Ninth City is three aspects: establishing a platform; nurturing products; and building a distribution network."
For large teams to survive, they should not only focus on iPhones but also pay attention to Windows Phone and Android. They should not overly focus on technology but rather on products and extensions across different platforms.
Timing makes heroes, and mobile game entrepreneurs should adapt to timing and seize market development opportunities. Founder of 139.ME Zhu Lianfei stated: "At this stage, the market trend is gradually moving towards content and services, focusing on product extension. Small teams should not only focus on iPhones but also consider Windows Phone and Android. Do not overly focus on technology but rather on products and extensions across different platforms."
Major players reshuffle the industry
Despite the rapid growth of the market, Chinese companies still cannot escape the fate of being more successful abroad than at home, largely relying on overseas markets for profit. In 2011, Beijing Digital Wanshi Wireless Technology Co., Ltd. generated nearly two billion yuan in revenue from a single "WWII Storm" mobile online game, with 70% of the revenue coming from overseas.
However, some industry insiders told reporters that the existence of models like 91 Mobile Assistant has cast a shadow over mobile game payments. It is understood that 91 Mobile Assistant purchases apps from Apple's APP Store and redistributes them for free to users. After attracting users with a free model, advertisements are embedded within the games. Developers are then negotiated with, and if an agreement is reached, the advertising revenue is split 70-30 with the developers. This model makes it difficult for users to form a habit of paying for apps.
For startup teams, the low cost, low threshold, and broad market space of mobile game development make it easier to succeed compared to other fields. Small teams are more likely to seize market opportunities and adapt to new technologies. Therefore, small teams should leverage their advantages, utilizing large platforms without competing directly with big companies and platforms.