The China MMO Market - Tapping the China Pie

This is a look at the MMO market in China from the prospective of a American expat living in China. Having lived in China for almost 3 years, I had a chance to see how people live and play. The internet cafes are the main source of internet gaming for those who can't afford a computer and internet, or those who don't want to be yelled at by parents for playing games instead of doing homework.

I saw huge markets full of consumer electronics, hardware and software. This industry is hot in China, you should have seen how the Businessmen were rushing to be the first to have an authentic Iphone from America. Many people were asking me “Can you get the American Iphone?” they were willing to pay more then 200% of the market price.

The technology market may be hot, but the gaming industry is just warming up. The fact is Chinese consumers don't have to buy a computer to play games. Plus video games and internet media are the cheapest forms of high quality entertainment. The problem is you have to get around the Great Wall of the Chinese Government, which filters out foreign businesses from penetrating too much of the domestic market share.

At first the only place I could use the internet was at the internet bars. These places are located all over China, every neighborhood in the country has one. Even a small farming town has one or two small internet bars. These internet bars charge an hourly rate of RMB 3 – 6 an hour depending on the quality of the computer or seat your in.

The computers in the net bar are already loaded with the most popular games. If there's a game that you want to play and they don't have it, just ask the manager and they will upload it to their server. During peak hours you may be waiting for an open computer, because the seats fill up quickly after normal working hours. This means over 100s of people fill millions of netbars scattered across every neighborhood in China.

Most of them are playing games and chatting with friends on QQ, which has over 800 million registered users. One trend I noticed is that gamers like to multi-task switching from the game to their QQ or browsing the internet. At a netbar, your time is limited by how much you want to spend and that makes people want to get the most from their time.

If you think you can tap the Chinese market, you had better know which company to partner with and how to deal with the Chinese Government. China isn't quick to let competition in, there are many mountains to climb before getting in. In Chinese business, relationships are an important asset.

Did you see what happened when the Chinese government flipped the switch on WoW. After renegotiating their license with a new company, they were broadsided by the GAPP (General Administration of Press and Publication) and forced to shutdown for months. It's a good thing that they had things worked out with the Chinese Ministry of Culture. Keeping good relationships within the Chinese government bureaucracies will help you keep stable ground in China.

Getting into the market is another story, I noticed only the popular name brands made it to the mainstream market in China. To do business in China you need to have a Chinese partner. The Chinese want an ample portion of their market pie, and if a game starts to get too popular they will start to fill that pie up with similar flavors.

Competition in China can get pretty steep when your up against numerous armies of gaming companies that sprout up from investment into this growing industry. If you want your game to stand out in that market you need it to be completely different then the competition. Being different isn't the only thing that could put you in the Chinese market, popularity is important too. If the game is popular in other countries, it is more likely to become popular in China.