China’s Gaming Boom

The Gaming Life

As the world began reflecting on the passing of 2016, Chinese gamers began focusing on the Golden Plume Awards, the country’s annual “Oscars of the Gaming Industry.” 360 Games walked away with the most-sought-after prize, the Most Influential Mobile Game Channel, and its individual games took two more awards.

More than a year has passed since Xu Yiran began leading the 360 Games team. Born in the early 1970s, Xu earned a double bachelor’s degree in precision instruments and automation from Tsinghua University and an MBA from the Chinese University of Hong Kong. Since graduation, he has worked in gaming for many Chinese and international companies including Sohu, Giant Interactive Group, Perfect World, and Electronic Arts.

Xu Yiran has wide-ranging interests, including more active hobbies, but as he puts it, “Games have captured most of my time and blend all my hobbies and expertise.”

More than two decades have passed since Xu became immersed in the gaming industry, during which time China’s role in the sector has ballooned at breakneck speed. In 1999, online games emerged along with the popularization of the internet. Around 2008, a boom of independently produced games was led by titles such as Dragon Oath and Jade Dynasty. Along with the tireless efforts and creativity of China’s game designers, the rapid growth in the number of internet users played the key role in facilitating the boom.

“China’s game market started by imitating output from places like South Korea,” explains Xu. “At the time, China’s games lagged far behind their foreign counterparts in fine arts and design. The gap has shrunk considerably since the turn of the century when we gradually began shifting to independent production.”

A Freshly-Paved Road

Since 2010, China’s gaming industry and market have developed rapidly. The Report on China’s Game Industry 2016, jointly compiled by China Audio-video and Digital Publishing Association, Gammadata, and the International Data Corporation, was published at the end of 2016. According to the Report, revenues from gaming reached 165.57 billion yuan in 2016, up by 17.7 percent year-on-year. Online games independently developed by China earned 118.25 billion yuan, increasing by about 20 percent over the previous year, and revenues from overseas markets surpassed 7.2 billion yuan. Moreover, the marketing arm of China’s gaming industry has become more defined.

Despite a new, hopeful environment, Xu Yiran maintains that the gaming industry will not grow without new ideas. “The secret formula to win must be revised across various stages,” he asserts. “In the early stages, technique prevailed, and the stability of servers was most vital. The next stage was determined by creativity and graphic design. The last stage is about originality and intellectual property. The core elements have continuously changed.” Such a philosophy inspired Xu to bring new ideas for business development when he took over the team at the end of 2015.

Eventually, his ideas formed two major plans. The “Heavenly Plan” offers a subscription in exchange for beta testing and big data for developers to reference, capitalizing on the advantages of 360 Games’ popular channel. The year-long plan has primarily benefited overseas game suppliers by providing valuable feedback, which has in turn minimized the risk of distribution in China.

The “Pinpoint Plan,” on the other hand, is meant to eliminate roadblocks hindering new developers. “Today in China, many young R&D teams are completing big projects with their combined skills in fine arts and programming,” explains Xu. “But they still don’t succeed because they lack veteran producers and designers to ensure that all the necessary points have been covered.” To help out younger teams, 360 Games recruited industry veterans from around the globe and established a special design center to provide timely counseling on all R&D procedures and increase distribution opportunities. In 2016, The Tale of Lost City, a massive multiplayer online role-playing game for mobile devices developed with the help of 360 Games, ranked among the top ten bestsellers on the Chinese mainland and topped bestselling lists in Taiwan, evidencing the effectiveness of the “Pinpoint Plan.”

Bright Future

In July 2016, Newzoo, a market research company from the Netherlands, published a report analyzing trends and regional numbers of the gaming industry. Understandably, China is already the most valuable of any gaming market at US$24.4 billion.

The Chinese government’s tremendous support in recent years has accelerated the sustainable development of the gaming industry, enhancing Xu Yiran’s confidence in the long-term prospects of the market. “China will become a more mature market for games,” he predicts.

“Along with great support from the government, some other factors make me bullish on the market,” Xu continues. “First, China has experienced changes in its social environment, which is now far more diverse. When I was young, gamers and developers were considered useless. Today, however, young people enjoy more tolerance from the world and older generations. Still, the gaming industry will not advance without support from several different generations. Because today’s young practitioners grew up in an era of quick development, they have greater support and guidance from society, the industry, and even their families.”

He also expressed concerns such as different producers copying each other. “Mobile games have become so popular today that every company is probably working on their own.”

China has yet to build a game to become as popular globally as titles such as Civilization and Final Fantasy, despite many stunning original works. “The gaming industry needs quality teams to concentrate on each specific realm, including marketing,” Xu concludes. “Young practitioners need more opportunities to become tougher, gain experience, expand their horizons, and broaden their vision.”