The Weekly Raid: Is The Influx Of Chinese Money Good For The Gaming Industry?
It was during the early years of this century that Western gamers first witnesses an influx of Korean games, with the most common genre being MMORPGs. This influx soon became a tsunami that washed literally hundreds upon hundreds of games of varying quality upon our shores. This 'Korean Wave', as I just coined it, left a permanent mark on the gaming industry -- the free to play model.
While popular in East Asian for many years due to rampant and unaccountable piracy, Western gamers got their first taste of free to play with titles like Nexon's MapleStory and GalaNet's Fly For Fun. Love it or hate it, free to play stuck. Western studios soon started adopting the foreign business model and the fruit of that cultural exchange were some of the best games ever made, including League of Legends by Riot Games and Warframe by Digital Extremes.
As the second decade of the century approaches its final lap, the Western gaming market is being overwhelmed by yet another East Asian contender. This time its China. As many of you may know, both Riot Games and Digital Extremes were bought out by Chinese companies. Even Western MMORPG stalwart RuneScape was gobbled up by Zhongji, a Chinese mining (iron, not virtual currency) company.
According to Digi-Capital, the Chinese hyper-corporation Tencent alone was involved in 40% of all money invested in game company funding over the previous year. They were also involved in over 75% of all gaming industry mergers and acquisitions. Tencent's latest investment was a $2 billion stake in French gaming company Ubisoft.
While the Chinese market and Chinese developed games often share the free to play model popularized by Korean companies, they also bring their own "innovations" to the industry.
If you're wondering why more and more games include a never ending litany of 'daily login bonuses, multiple currencies of varying complexity, drop-dead easy progression during the leveling phase (MMORPG specific), and other such features, its likely due to Chinese influence.
Chinese gaming studios, particularly in the PC browser game subgenre, have perfected the concept of 'monetization pits', features in games such as the pet upgrade system that are specifically designed to extract the most amount of money from users. Games designed in this way put monetization and 'retention' first. Its a concept Western studios did not embrace until coming into contact with East Asian developers, particularly Chinese developers in the PC space and Japanese developers in the mobile gaming space.
Whether you love or hate all these new monetization and retention tricks, they seem to be here to stay. Firstly, these features seem to work. Second, the investors funding the majority of the industry today expect these features to be in place. The question is, how do you feel about this new trend brought about by the recent wave of Chinese money? Share your thoughts below!
Bonus: check out this old GDC presentation on the browser gaming market in China!