The Chinese Game Market: A Contrarian View

I spent nearly two weeks in China at the start of 2013. I had the experience of being in Beijing during the worst pollution ever recorded. Made worse by the fact that everyone in China smokes, as there is no belief that smoking is hazardous. The lack of public health awareness on the hazards of smoking is likely due in large part because the government makes so much money from cigarettes. Current projections estimate as many as 100 million of the 300 million Chinese aged 1-29 will eventually die from smoking related causes.
China is, of course, a huge power in every possible measurement.  An estimated 300 million gamers. Nearly $10 Billion Domestic Video Gaming Revenue in 2012, which represents a 35% growth over 2011 and a projected $20 Billion market before the end of the decade.  While numerous developers and publishers have hailed the Chinese market as a combination of the sleeping giant and the holy grail (the Holy Giant? Or the Sleeping Grail?).  I came away with a different perspective.

The Tourist View

I spent a great many days traveling on  video game business last year. (3 trips to Europe, 1 to Iceland and 1 to China, plus another dozen domestic trips).  When I travel I like to get out and explore.  Walk the streets, eat somewhere new every meal. Visit the grocery and department stores and the offbeat museums.  The part of Beijing I was staying in was near the Zoo, but still far enough from traditional tourist activity that despite all my exploring and wandering, I did not see another Westerner until my fourth day, and it took my until day six to find another English speaking Westerner and the only Americans I found were at the Great Wall on day 11.

The Chinese People were all friendly and outgoing and at times still in awe at Westerners.  The days of being followed on the street by dozens of curious Chinese who have never seen a foreigner are gone, but only just. On several of my outings, younger Chinese would point to their US branded clothing, then me, then gesture #1 with their finger.  In all my overseas travels, that was first, along with being asked to pose for photos, simply because I was a Westerner.

Despite the ban on video game consoles, they were always available for sale.

Everyone I met was gracious and kind, and quick to offer instructions or a story or assistance no matter where I was.  Everyone made a conscious effort to ensure I left with a good impression.  As a history and film buff, it was a great pleasure to Walk The Great Wall (despite the graffiti and the ski lift and toboggan ride) and the Forbidden City.

The food was always fresh and simply amazing. I don’t want to overstate the obvious, but despite visits to the international districts in most major cities, I had never had real Chinese food until my trip to China. Every dish had a half dozen new flavors I had never tasted before. Though there were plenty of signs, even at my posh hotel, clearly stating not to drink the water without boiling it first. Even the fresh water faucets at the airports, dispensed boiling water.

Despite the ban on video game consoles, they were always available for sale.

Chinese Developers/Publishers

The Chinese Developers and Publishers I met were all devoted to their craft.  I have never had a meeting with a publisher where game mechanics were discussed in such detail and with such passion. I have had too many meetings in the West, where the game could have been replaced with a bar of soap or a hedge trimmer and everyone would have had the same level of commitment and enthusiasm and understanding of the art form. 

The Chinese I met with knew their games.  They studied them, they analyzed them from every angle, they timed every mouse click, they fleshed out every tech tree, but they still found enjoyment in the game mechanics, despite all the spreadsheets.  While casual games are growing in popularity, the average Chinese gamer was more into hardcore games than the US counterpart.

Chinese Education System

Despite the passion and devotion of the employees and the pride of the managers in their team, I had numerous conversations after hours on the difficulty of finding good candidates to hire. This would always lead in the direction of laying the blame on the Chinese One Child policy in general, and the result of an education system built on memorization rather than creativity specifically.

There is enormous pressure placed on the single child, as the income from that child is what is expected to provide for their parents in old age. In part because of the huge numbers, the preferred method to weed out children for success is standardized tests. As such, there is an intense emphasis on memorization, speed, practice at the expense of more creative problem solving and extracurricular activities. I was told, it is more important to know the correct answer, than why it is correct. There is little interest in showing your work.
An education system built on that belief will create a great many successful professions, but the arts and entertainment are unlikely to thrive in that environment. I had often been told that we should be afraid of China because China has more Ph.D. candidates than the West as Ph.Ds.  But, there remains a great many benefits in our Western education system and support of liberal arts.

The average Chinese gamer was more into hardcore games than the US counterpart

In all the miles I walked, through the neighborhoods, streets, parks, the only time I saw a basketball hoop or a soccer goal was when I stumbled across the school for Olympic athletes. To further illustrate the lack of extracurricular participation one need only look at the frozen lakes in Beijing. The ice was always filled with families enjoying themselves, but they were not ice skating. They were pushing themselves along, while siting on folding chairs bolted to a plywood platform on rails. When I asked why no one ice skated, I was always told no one knew how. When asked why did no one know how, I was given a quizzical look and asked what use was it to learn to ice skate?

Chinese Government/Censorship.

A game cannot be sold in China without going through a Chinese Publisher who must submit the game to the Government for approval, which can add at least six months to the submission process. This establishes a set of gatekeepers, and favors those with better relationships with the government.  Typically these are families from ranking communist party members and military officers.

There are also words and phrases that must be censored from any chat functionality and a very hands on, very thorough scrubbing of chat in near real time.  The approval process, wanting to keep the government happy, and a society where creativity is not always celebrated has lead to a less than successful native Chinese development community.  One in which none of the top 25-50 games (depending on sources) were created by Chinese developers.

Net Cafes/Privacy in Numbers

Net Cafes are still a very big part of gaming in China, though they are slowly beginning to lose their popularity. Only Chinese Citizens can use them, you must present your ID card to rent time. While I was allowed inside a Net Café, I was not permitted to use any of the computers.
All the computers run Windows XP (as do nearly all the computers in China), which adds another step into developing for China: supporting a 13 year old OS with modern game engines can be challenging. They are filled with young men for the most part, who come there to get away from their parents.  In a small apartment in China, there is very little privacy.  While all the computers are lined up like a classroom, and the computers can only run pre-approved software, there is no real privacy.  But at least you are away from Mom and Dad.  The computers are not used simply for gaming, but also to watch movies, listen to music, etc. Often while eating food cooked on site.

With the one child policy, I would often see 6 adults and 1 toddler on outings to the park: Mom and Dad, plus both sets of grandparents.  The need for some privacy is understandable. The single child is treated with what could be described as velvet fist. On the one hand, they are on only child to be doted upon (this was referred to as the Little Emperor Complex), on the other hand, they must be driven to succeed as they are likely the parents best chance at a better life.

Western Story Telling

There remains something magical and universal about the way Western storytelling has evolved. It may be the three act structure, the mono-myth or just the fact that we all like to see sh*t blow up from time to time in a tale where the underdog comes out on top.  That has migrated from books to Hollywood to gaming.

Japan has had significant run as the leading influence in gaming. But that faded during the last console generation and will likely decline further in the new generation this year.  There will still be Japanese hits and Consoles, but the fact that the ten most popular games world wide are no longer all created in Japan shows that Western influenced game design is here to stay.

But China does try to control the lure of Hollywood.  China (as well as other countries, I’m looking at your France) dramatically restricts the number of Hollywood movies that are allowed into China, and those that are allowed, must be approved and often censored.   There are no formal rules on limiting the percentage of Western games, but several of the publishers I met with are increasing funding for native Chinese development.  A combination of pride, profit (a successful Chinese game could also be sold to the West), and to hedge their bets against a possible backlash that could restrict the number of Western titles they could sell in China.

In conclusion, I do not believe that the Western “advantage” will last forever, I do not believe it will last even a generation.  I want to reiterate that the publishers and developers I met were all passionate, and frankly had a better understanding of game design fundamentals than I have seen at several Western Publishers.

China is, of course, a huge power in every possible measurement

But I do have a proposal based on this point in time. Rather than merely porting successful Western games to the Chinese market, personally I would love to create a game, aimed squarely at the Chinese Market. A game that celebrates the diverse, rich history of their storytelling, culture and art styles, but with the subtle, but respectful twist, that a team of Western developers would add in terms of structure, art style and game mechanics.  This game would be less casual than a developer could get away at making for the Western game market, less hand holding, fewer cut scenes, more action and mouse clicks per second.

In the next column, we’ll cover a market that may be a hidden gem, a little closer to home, and little more accessible.