Transition to Mobile Gaming Community: In order to cope with the enormous challenges brought by smartphones, SKY had already started its transition strategy by shifting its focus to mobile gaming communities. Previously, SKY launched "Mao Pao Community," a mobile social gaming platform very similar to Japanese social giants DeNA and Gree. Users can play community games developed by third-party developers on this platform and pay to purchase props. SKY claims that by the third quarter, Mao Pao Community had more than 140 million registered users, with over 16 million active users.
In terms of business model, SKY mainly collaborates with some mid-to-low-end mobile phone manufacturers to pre-install Mao Pao Community-related software on phones before they leave the factory. After users consume within these applications, SKY and the phone manufacturers split the revenue in a 30-70 ratio (with the phone manufacturer taking the larger share).
From the situation in the Japanese market, mobile community games have great market potential. Gree's recently announced Q4 2011 financial report shows that Gree's net sales for that quarter were approximately $540 million, an increase of 190% compared to the same period last year, with net income of about $165 million, up 206% year-over-year.
A senior executive from a domestic community game developer told a reporter that the "three low groups" (low education, low income, low age) targeted by SKY have a higher willingness to pay when playing these games than people imagine, with individual users potentially spending around six to seven yuan per month. This is because most of these users lack other forms of entertainment, making their mobile phones their most important means of entertainment.