China’s mobile game “buying spree” may be drying up, says one publisher
Since gradually easing restrictions on the sale of video games within the country, China has become a huge emerging market for the video game industry. Analysts at PricewaterhouseCoopers LLP valued the Chinese game market at $10 billion, and a 2014 report by Newzoo projected that the market could reach more than double that amount within the next few years.
Mobile games have been especially lucrative thanks to their low cost, quick development time and high demand, but according to Jeff Lyndon, president of Chinese mobile game publisher iDreamSky Technology, the golden age of that market could soon be ending.
“This year for the Chinese market, a lot of us are predicting a cold winter,” Lyndon told GamesBeat. “2014 was really hot. Any developer that came out of a big company creating some sort of a hit – just a producer and a couple of friends — could come up with a valuation of around $5 million right off the bat.”
“The land-grab in the Chinese game market is slowing down”
Lyndon noted that many mobile game companies were earning money quickly in the beginning, but they were unable to sustain their profits long-term, which has scared away many investors from backing game developers in the future. Also, according to Lyndon, “the land-grab in the Chinese game market is slowing down,” and new developers and publishers are finding it more difficult to gain a foothold in already established territories and a “crowded” market.
With many new Chinese game makers lacking proven track records or compelling libraries of games, many investors are turning to western developers for already proven products. Lyndon’s own iDreamSky Technology specializes in localizing popular western games for the Chinese market, such as Fruit Ninja and Temple Run, but Lydon said the company has “some big announcements coming up” in regards to new IP-related games.
Just as the Chinese market is new for western game companies, Lyndon points out that the Chinese game industry has also found new opportunities in the west, saying, “It’s only a matter of time until a Chinese publisher cracks the U.S. market.”
photo credit: neeravbhatt via photopin cc
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