Shanghai Surprise

We wish that we had a well-developed SNS (Social Network Services) business in China, but we are still looking for a successful business model that's able to meet the consumption habits of the Chinese. Professionals in this business are full of confidence; but if we talk about making a profit, game companies are still more interested in doing web games.

The games industry in China is still in a phase of continuous development, and many SNS game businesses are not mature. Except for several large social exchange platforms, like kaixin001.com and renren.com, many small and medium-sized social network services are challenged by fierce competition, and M&A activity is not uncommon.

On the other hand, the online games publishing industry in China, which is only about eleven years old, has completed its transformation from simple distribution to independent R&D, and laid a solid foundation for successful export of our domestic online games to other countries.

Mobile has a potential market size you can hardly imagine, especially in China.

Zhihai Han, GAPP

However, overseas expansion to date has been mainly pursued by larger Chinese games companies, which have obviously strengthened their capacity to grow internationally by acquiring overseas IPOs, publishing their games in various languages, and participating in important overseas game exhibitions. This has been the common pattern for these game companies to explore the overseas markets. But more and more domestic online games companies have been implementing a gradual "walking-out" strategy with their self-developed products, and actively competing internationally. So the overall image of the Chinese games industry has steadily improved.

In the past two years, web games have risen and drawn the attention of the domestic industry, with market share growth getting bigger and bigger. That's why we organised a Web Game Zone inside the ChinaJoy exposition this year, to serve all these web game companies.

We are also very optimistic about mobile entertainment for the next three years, following the popularity of smartphones and 3G in China. This year ChinaJoy also featured a Mobile Internet Entertainment Zone, because this is the future game mode. It has a potential market size you can hardly imagine, especially in China.

So we see that some real achievements have been made in web games and in the mobile entertainment field. ChinaJoy is like a mirror of Chinese games industry; it reflects the current conditions and development trends of the market.

If we look at the data, for example, the total number of titles shown at ChinaJoy 2010 was 290, but increased to 482 games this year. This reflects the industry's rapid growth and huge market demand. PC titles were still weak in 2011 though, with only ten games exhibited.

When we look into the kinds of titles that contributed to this year's increase, web games were up to 49 titles, from last year's 19. Mobile games also reached 91 titles compared with 38 in 2010. That's why we're excited about and glad to see these new growth areas for the next few years.

The number of MMOs increased as well; last year featured nearly 200 games, but this year 306 MMOs were demoed on the show floor.

At this year's expo, a total of 362 games were also yet to be released, and most of companies behind them were eager to find buyers or partners globally. These kinds of multiple business demands are why our business to business expo has more than tripled in size and B2B exhibitor numbers have gone up over forty per cent year-on-year.

During the twelfth Five-Year Plan, GAPP will prioritise the implementation of an overseas promotion program for China's original online games. Great efforts are expected to be made to create famous game publishing brands, and copyright trade platforms with international reach. The goals include exporting 100 domestic online games every year, and encouraging large online game publishing enterprises to invest directly in overseas markets, to become competitive players internationally.

Also, the release of classic overseas online games will be encouraged in China, instead of blindly introducing a large amount of roughly made games, so as to make the games industry in China more professional and international.

During the next few years, the largest change within the Chinese games industry will be increased efforts to "walk-out" and "invite-in" games. This should help to mature and moderate the games industry in China, as well as encourage steady growth and increasing strength.