China Shakes the (Gaming) World

Ever since China opened up its markets to the world companies have invested trillions of dollars into the country, hoping to be the one that reaps the rewards of access to that colossal market. Internet stalwarts like Uber and Ebay have tried and failed, and on the gaming side Sony and Microsoft are still barely chipping away at the market, yet somehow Valve has grown its Steam userbase in China, giving indie developers a crack at the Chinese gaming population.

China is well known in the gaming scene, but common wisdom was that the vast Chinese market was never going to pay for a game. Most people in China's first experience with gaming was through mobile phones, and with the subsequent turn of that marketplace towards F2P, it further entrenched the notion that Chinese gamers were unwilling to pay for premium games.

Even Valve's sideways entry into the market was via free-to-play. An alliance with Perfect World literally forced gamers to download Steam in order to play the Dota 2 in China. In fact many of them protested at having to download a piece of useless “zombie” software. But then a funny thing happened. While the Chinese government was busy banning Gears of War 4, Steam was subject to no such restrictions. The lure of ostensibly banned games being available on Steam seems to have led many Chinese gamers to buy and download GTA V on Steam. Enough of them have bought GTA V that China is the second largest country for GTA V in terms of units sold.

Steam took notice, and took steps to court the Chinese market by supporting payments in Chinese Yuan via payment services like AliPay and UnionPay, which greatly increased Chinese gamers' access to Steam games. In 2016 Steam also held the inaugural Lunar New Year sale to further embrace the Chinese Market. AAA game development has also taken notice, with increasing numbers adding Chinese language and audio to their games. Indie games like Lost Castle have also made a killing, selling 200,000 of its 300,000 total units in China alone.

There seems to be a growing appetite for paid PC games in China. On reddit commenter even mentioned that there is a sense of obligation on the part of Chinese gamers, saying “I have to buy (gamename)to pay back the debt no matter how bad it is. Because they have played lots of pirate version growing up lol.” And yet surprisingly very few indie developers seemed to be taking the Chinese market seriously, including myself.

Maybe We'll get Banned in China

Personally, as someone from the Philippines, I simply assumed that the Chinese market behaved in a similar fashion as the rest of South East Asia, where I grew up. Players bought pirated games as kids and then transitioned into playing free to play games. The population playing legitimate games was simply too small to mater financially. Our strategy was to try to make it big in Western markets (ie US and Western Europe) and the other markets would follow suit. We even joked that maybe the best thing to happen to us would be to be banned in China, because then at least we'd get some press from it.

So I have to admit when I first received an email from Fall Ark of indienova with an offer to localize the game in Simplified Chinese, it wasn't on the top of my to-do list. I was flattered that he had been following the game on Tigsource for a while and thought it would be worthwhile to localize the game into Chinese, but I simply didn't take the market seriously. In my defense, September and October of 2016 were very trying periods for me. We were flying across the world to present Political Animals to gamers at PAX, EGX, TGS, and BICFest and trying to gauge feedback and finish the game all at the same time. It was probably the most stressful times of my life, and trying to add another language to our localization tasks might have have driven me crazy. But as I'll share with you all in a bit, I now really, really regret not having taken advantage of this generous offer sooner rather than later.

Political Animals in China

In our last blogpost, I mentioned that I was pleasantly surprised at how much our sales in China had picked up after we got localization done. I'll dig in to the numbers to give you some more context.

When I compared the two week period before we announced Chinese localization and 2 weeks afterwards, I realized that there was a 8x increase in the total number of units sold during that time. To take a longer view, I compared the sales for the 5 weeks prior to localization launch to a combined 2 and 3 week period after the launch and 3 weeks in January (excluding the units sold during the Winter Sale, which we’ll get to in a moment) and found a 3.2x increase in total units sold over the course of 5 weeks.

What can we learn from this? The amount of units sold in China was negligible prior to localization. It’s common knowledge that Chinese gamers usually won’t bother with a game if it’s not localized unless it’s massively successful. Adding localization to our game exponentially increased the chances that random Chinese gamers might pick up our game. Interestingly just as I was writing this we sold 4 more units in China, and 1 in Australia.

The only upsetting thing about this is thinking about how many sales we might have gotten on release day when we had front page status on Steam.

Steam Winter Sale

Things got even more interesting during the Steam Winter Sale, which according to Sergey Galyonkin on Steampsy drives the most unit sales of games. As you can see from the graph above, Chinese sales represented 17% of our total sales during the Steam Winter Sale, more than the UK and Canada combined! By comparison Japan and the Russian Federation, both large non-English speaking markets, only mustered 1% of the total sales each.

Obviously these are exciting numbers, but first you have to ask yourselves whether or not these numbers scale. After all, we’re looking at a very small sample size here in terms of units sold and time elapsed. But given the fact that games as vastly different as GTA V and Don’t Starve both have China as their number 2 region in terms units sold, I’m fairly confident that over time, that will be the case for us as well.

One major caveat that I have to mention here is that since Steam suggests pricing of 50% lower for China, that means that while the increase in units may be impressive, the revenue increase will be less so.

How to reach your Chinese Audience

Assuming you’ve bought in to the idea that there is huge potential in the Chinese Market, what do you do? First, localize. We were lucky enough that we were able to get free localization from indienova. They are pretty active about localizing games they like, so go ahead and get in touch with them if you haven’t already been contacted.

If you haven’t been contacted by indienova, there are indie game publishers in China that are actively searching for games to localize and launch in China. Another Indie and Coconut Island Studios are two examples of that. I would actually suggest this path for English speaking indies that don’t have access to someone who understands the Chinese market. These companies have relationships and fanbases that they can use to promote your game much more than you could do so on your own, especially given the fact that Facebook and Twitter are banned in China. Streamers are super big in China but unless you can read Chinese or have relationships with them there's almost zero chance you can get one of them to play your game. We actually pitched our game to Another Indie but they declined due to concerns over the political nature and style of our game (it didn't help that the game hadn't done well so far).

So for the most part we are DIY-ing it. We went and made a Squeakywheel Weibo account since thats what folks use there instead of Twitter/Facebook. We post there every now and then using either Google Translate or asking some Chinese friends to do short translations for us. As for stuff we post, we usually look at either reviews of the game in Chinese or screenshots people have posted of the Chinese version of the game.

This funny review in Chinese got quite a few views. When run through Google Translate it reads:

Yeah, we didn't get it either, and when we asked a taiwanese friend to translate it he said it was just full of bad puns!  It's hard to really say how many people we're really getting to click on our link to go to steam, but it's a toehold and we're taking advantage of as best we can.

We've geared up for a 40% discount during Chinese New Year weekend. Luckily it's the year of the rooster, and whaddayaknow we have a rooster on our candidate roster. It won't be as successful as if we had some proper support in China but I'm hoping it will make some impact. I'll report on that in a future blogpost.

The Window may be Closing

I personally want to push this as far as I can to try and see if there is room for markets for us aside from the US and Europe. The larger and more diverse the markets that we can sell our games to, the more indie game studios can survive and thrive. If a game that doesn't do well in the US can thrive in China, that should be celebrated.

However the window may be closing on indie and PC game developers in general. As previously mentioned, the Chinese government takes games seriously. They have a government body that regulates each and every game that is released on consoles, and recently this also affected games that were to be released on the app store. This substantially slows down game launches as publishers and studios have to jump through numerous hoops before to release their games. Publishers and large game companies have representation that can explain to them how best to go through the process, but small indies like us will be shit out of luck.  A recent government pronouncement has already started moving in this direction, so it may not be long before Steam's free pass gets revoked, and it gets much harder to release games beyond the Great Firewall. 

Tech Conglomerate Tencent has muddied up the waters even more as it launched a Steam competitor called TGP and plans to launch a gaming console.  TGP is restricted by the same government rules as Sony and Xbox, but it understands the Chinese market better and has every opportunity to replace Steam as the go-to platform for PC gaming.

In short, if you're an indie developer that feels like they have a shot at the Chinese market, you'd better make your move soon before that window closes for good.

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