THE COMING CHINESE WAVEHistory, Overview and Trends of Online Games in China (in10 minutes)

FRANK YUSHOUJI MOBILE ENTERTAINMENT

BACKGROUND•Chinadotcom Ion Global (CDC)• Principal Researcher Wireless and Games

•Microsoft Xbox (PC Games, Mac, Peripherals)• First Asia Regional Business Manager

•Microsoft Research Asia• Researcher Asia Cnter for Interactive Design

•MS IE 7 /MS Media Center• Program Manager

•MS Casual Games • Producer / Started first game team in China

•Shouji Mobile Entertainment• CSO/COO

Columnist•Gamasutra (China Games)•South China Morning Post (Beijing Byte)•China Tech News •Asia Pacific Management Forum

CHINA ONLINE GAME HISTORY Only about 10 years old as an industry Born from rampant piracy and low disposable income Similar to Korea in industry development and market 3 Waves but all still operating

Licensing / Portals / Korean-Taiwanese Games (2000-2003) China MMORPGS / Communities (2003-2007) Web Games/SNS (2007-Present)

China Online Games becoming mainstream media Youth Media Regulated

KOREA AND CHINA GAME INDUSTRY Korean/China MMORPGs hierarchical and structured China /Korean follow 80/20 rule China Game market regulated like Korea

Console ban .PC type games and UI (one handed gaming so players can

smoke) China and Korea gamers love Blizzard

Starcraft, Warcraft, Diablo (1 and 2) and DOTA are all still favorites on LANs because they are well designed and free in Internet Café/Bangs. WoW benefited from player familiarity

WAVE 1 LICENSED KOR-TWN MMORPGS Subscription Service based Localized and operated locally

WAVE 1 PORTALS AND TRADITIONAL GAMES

Sohu (spun off online games unit twice) Sina Netease Shanda Kingsoft (China’s MS made no money

on productivity software but profitable on games)

WAVE 2 CASUAL GAME COMMUNITIES•Free to play•Monetization from avatars •And virtual goods

WAVE 2 ADVANCED CASUAL•Free to Play•Virtual Items•Avatars•Special Levels•Appeals to women

•Audition•Kart Rider

WAVE 3 CHINESE ADVANCED CASUAL

Chinese game companies have Created their own versions of Korean advanced casual games

WAVE 3 CHINESE MMORPGS

•Blizzard/the9• First to break ban on broadcast adv.• Western game design and backstory• Pre-paid cards

•Zhengtu Online shifted the industry• Online/ Offline Event based gaming• .Cafe Channel marketing and promotions• Designed to be addictive/gambling

•Perfect World• Export MMORPGs tech/licenses

WAVE 3 WEB GAMES / SOCIAL GAMES Kaixin001

Parking wars Friends for sale

Trevian & Clones Browser vs. Client

GOVERNMENT REGULATORSMain Overseers Ministry of Culture Ministry of Information Industry General Administration of Press and Publications

Also… State Administration of Radio, Film and Television Ministry of Commerce Public Security Bureau

JingJing and ChaCha Internet Cops

WHY THE GOVERNMENT WATCHES

TAKE AWAYS Virtual transaction / avatars Business model impacts game design Games as Media and Social Facilitators Games as FMCG consumables

Channel marketing Online and offline events Fill lifestyle role

QUESTIONSContact:

Frank.Yu@ShoujiMobile.com FrankYu@Gmail.com Twitter: Frankyu

Thank you