The South Korean gaming industry has long held the view that, in terms of quality, Chinese online games have not been on par with their South Korean counterparts. Aside from the moderate success of *Perfect World* in the South Korean market in 2007, Chinese online games have not made a significant impact in South Korea.Unlike the development trajectory of the Chinese gaming industry—which progressed from MMOs to browser games and then to mobile games—browser games never gained widespread popularity in South Korea, where the industry transitioned directly from MMOs to mobile games. Consequently, Chinese browser games have not achieved notable success in South Korea either.
Chinese game developers accumulated significant technical advantages and marketing and operational expertise—such as in-game purchase models—during the browser game era. They later applied this expertise and these advantages to mobile games, enabling Chinese mobile games to rapidly enter the South Korean market.
The Chinese mobile gaming industry began to gain momentum in the South Korean market in June 2013. During this period, the South Korean mobile gaming industry was dominated by casual games with social features, as exemplified by Kakao’s success. Of course, there were also some hardcore games at the time, but they were very similar to the Chinese browser games of that era.
At the end of 2013, RPG mobile games began to appear on the South Korean market, while the expansion of Chinese mobile games into the South Korean market had come to a standstill.
In the second half of 2014, Chinese mobile games saw a significant improvement in quality. Building on the substantial capital they had previously secured in the Chinese market, they began a major push into the South Korean market. It was also around this time that well-known South Korean publishers began to focus their attention on Chinese mobile games, and this period marked the start of significant achievements in this area.
A prime example is *Dota Legend*, which rode the wave of its massive popularity in China to enter the South Korean market. Backed by substantial capital accumulated from its success in the Chinese market, the game launched a large-scale marketing campaign in South Korea, which helped it gain significant popularity. Downloads and sales of *Dota Legend* in the South Korean market have continued to climb.The South Korean industry predicts that Chinese mobile games will continue to penetrate the South Korean market in the future. In particular, recent Chinese games released in South Korea are already on par with South Korean games in terms of quality alone; in fact, some game features are even more advanced than those of their South Korean counterparts.Currently, the South Korean industry views the entry of Chinese games as a threat to the development of the South Korean mobile gaming sector. As the saying goes, “The best defense is a good offense.” Furthermore, since the South Korean industry launched its global expansion strategy at the beginning of this year, the Chinese market—one of its key targets—has been closely monitored by South Korean companies.
According to industry analysis in South Korea, the decisive factor behind the rapid growth of China’s gaming industry lies in the dramatic surge in the number of users. While this surge began to slow in 2012, by 2013 the number of Chinese gaming users had reached nearly 500 million—making it the world’s largest gaming market in terms of sheer scale alone.Although the overall growth trend of China’s gaming user base has slowed, the number of mobile gaming users has experienced explosive growth since 2013.
In 2013, China’s mobile gaming industry experienced explosive growth, with the total size of the gaming industry—including mobile games—reaching approximately 15 trillion won. In the same year, South Korea’s gaming industry was valued at 9.007 trillion won, meaning China’s gaming industry was roughly 1.5 times the size of South Korea’s. Given China’s continued growth momentum, it is highly likely that China will become the world’s largest gaming market in the future.
As shown in the chart above, the growth rate of China's gaming industry reached its highest level in nearly five years during the first half of 2014, with the industry growing by a full 46.4 percent year-over-year during that period.
The chart above categorizes Chinese games into client-based games, browser games, mobile games, social games, and single-player games. We can see that all categories of Chinese games experienced growth in 2013, with client-based games continuing to dominate, accounting for 65 percent of the entire gaming industry.
By 2014, while other game categories were experiencing slow growth, the mobile gaming sector had emerged as the vanguard of the entire gaming industry with explosive growth.According to data, the Chinese mobile gaming market reached 12.52 billion yuan (approximately 2.253 trillion won) in the first half of 2014, already surpassing the total market size for the entire year of 2013, which was 11.24 billion yuan (approximately 2.0232 trillion won).Based on this trend, the Chinese mobile gaming market is projected to exceed 5 trillion won for the full year of 2014.In 2014, mobile games accounted for 25.2 percent of China’s gaming industry, while in 2013, mobile games accounted for 23.9 percent of South Korea’s gaming industry. Although there is a gap in the scale of the gaming industries between the two countries, one thing they have in common is the rapid development of mobile games, which account for a similar proportion of the overall gaming industry.
As shown in the figure above, domestically produced games have accounted for 57% to 63% of the Chinese gaming market over the past few years. In the online gaming sector, South Korean titles such as *Blade & Soul*, *Dungeon & Fighter*, and *CrossFire*, as well as American titles such as *World of Warcraft* and *League of Legends*, have been extremely popular in China.
However, the situation is quite different in the mobile gaming sector. Due to the rapid growth of the mobile gaming industry, government policies have created barriers to entry for overseas games (such as the inability to directly access Google Play), and coupled with significant improvements in the R&D capabilities of Chinese mobile game companies, domestically produced games have gained a strong foothold in this sector.Riding this momentum, domestically produced mobile games accounted for 70 percent of the market share in the first half of 2014, and this share is projected to increase further in the future.
Looking at the Chinese gaming industry as a whole, the South Korean industry believes that Chinese games have the following four characteristics:
1. Sustained Rapid Growth
According to relevant data, all segments of China’s gaming industry in 2013—including client-based games, browser-based games, mobile games, and single-player games—showed a trend of growth. Among them, the mobile gaming industry emerged as a “dark horse,” demonstrating particularly remarkable growth and becoming the second major growth driver for the gaming industry after online games.Along with the rapid growth of the mobile gaming industry, 3G and 4G mobile services were officially launched, creating favorable conditions for the further development of mobile gaming.
In addition, as browser technology has advanced, the quality of web-based games has improved. These developments, in turn, have driven the evolution of client-based games, creating a virtuous cycle. The government has also provided support to the gaming industry through infrastructure and policy measures, which has served as a catalyst for the industry’s rapid development and sustained growth in the coming years.
2. Improvements in both Quantity and Quality
In 2013, China's gaming industry saw significant growth in terms of volume, with mobile games experiencing explosive growth, while client-based and browser-based games showed steady growth. Recently, the quality of domestically produced Chinese games has improved markedly, a trend attributed to intensifying competition within the industry. As market competition continues to intensify, companies must prioritize high quality as a key strategic focus.
The State Administration of Press, Publication, Radio, Film, and Television, together with other industry associations related to the gaming sector, has joined forces to provide policy support for the gaming industry, fostering the development, publication, and promotion of high-quality games. The most representative examples include the “China National Online Game Publishing Project” and the “Top 10 Chinese Games” initiative.
Driven by changes in the market environment and supported by government policies, the quality of Chinese-developed games has continued to improve, and their artistic value has also increased.
3. The government’s long-term attention to and policy support for the gaming industry
In August 2013, the State Council issued the “Several Opinions on Promoting Information Consumption and Expanding Domestic Demand,” providing active policy support for the development of emerging cultural industries such as the electronic publishing sector, traditional media, and mobile new media.At the Third Plenary Session of the 18th Central Committee, the Communist Party of China also emphasized the need to improve the market system for the cultural industry, increase the openness of the cultural sector, and build a “cultural powerhouse.” It called for rewarding state-owned and private enterprises with outstanding performance in this sector to encourage more companies to further develop the cultural industry. Policy support for the gaming industry has enabled gaming companies to expand their domestic and international operations more smoothly.Under the policy guidance of the central government, local governments have also provided targeted preferential policies to enterprises in the gaming industry, all of which have stimulated the development of the gaming sector, including the mobile gaming industry.
4. Hardware Support
Starting in 2013, sales of smart gaming flat-screen TVs from various brands surged. Xiaomi, Baidu, Alibaba, and Perfect World all launched TV set-top boxes, and gaming was one of the main features of these devices.
The South Korean industry has analyzed the reasons behind the growth of China’s gaming industry as follows:
1. Continuous growth in the number of game users
First, there has been a significant increase in the number of Internet users in China, with the proportion of gaming users rising. This increase in gaming users is primarily driven by the explosive growth in mobile gaming users. It is highly likely that the number of mobile gaming users will continue to grow in the future.
2. Gaming users’ spending needs and spending power have increased
As the personal financial circumstances of gamers have improved, the proportion of gamers with increased demand for and ability to spend on games has grown. On the other hand, the gaming industry has also benefited from consumers’ expanding demand for high-tech products and entertainment content.Furthermore, in addition to spending on the games themselves, the mobile gaming industry has also driven further growth in mobile data consumption as it has expanded. In other words, spending across all aspects of the mobile gaming industry has increased.
3. Weakening Barriers to Entry in the Gaming Industry
In the era when client-based games dominated the market, technological and financial constraints made it difficult for games to enter or exit the market. However, in today’s era centered on mobile games, the barriers that once existed between countries have been significantly reduced. Mobile games can now be successfully exported and imported, which has greatly promoted the development of the gaming industry.
4. Concentration of Capital
This is evident from the fact that many game companies have gone public; the “IPO boom” of 2007 and Youzu Interactive’s listing on the A-share market in Shanghai are prime examples. By raising substantial capital, publicly traded companies can secure funding for research and development, retain talent, maintain the quality of their top-tier games, and acquire or merge with other game companies. These factors, in turn, have fueled the growth of the gaming industry.
Faced with the recent surge of Chinese games, the South Korean gaming industry has conducted the above thorough analysis and plans to “turn the tables on them by using their own tactics,” formulating strategies to enter the Chinese market in turn. Let’s take a closer look at this by “knowing both the enemy and ourselves.”
One is the strategy regarding channels and partners.The iPhone accounts for about 10 percent of the South Korean smartphone market, while in China, that figure is around 15 percent. A commonality between the two countries is the high market share of Android. However, a key difference is that in South Korea, mobile games can be published and operated directly through Google Play, whereas Google Play has not officially launched in the Chinese market; instead, it is served by a large number of third-party channels.
From this, we can conclude that China’s Android market is fragmented, whereas Apple users have greater purchasing power, accounting for approximately 40 percent of smartphone game sales. Therefore, to successfully penetrate the Chinese market, it is essential to prioritize the iOS market and respond swiftly to market changes.When targeting the Android market, the challenge lies in navigating market fragmentation, as technical differences exist across each channel, and the requirements for contracts and game reviews vary. Therefore, it is essential to gather information on each channel in advance; aside from WeChat—the well-known Chinese equivalent of Kakao—there are many other platform channels available.Moving forward, we must focus on three key areas—technical support, communication, and the establishment of mutual trust between Korean developers and Chinese publishers—to devise strategies for each platform. Since there are both cooperative and competitive dynamics among the various channels, the order in which we launch on each platform must be determined only after thorough research and discussion.
One is a strategy related to localization.Due to cultural similarities, domestically produced Chinese games are easily accepted by players. Once a game achieves success, sequels or spin-offs are developed, ultimately creating a virtuous cycle. For example, wuxia and historical themes are particularly popular among Chinese players, and games featuring these themes typically rank at the top of the charts.
Systems and features unique to the Chinese gaming industry—such as the onboarding guides for new players—that were developed during the browser game era have gradually become formulaic; Korean games entering the Chinese market can draw inspiration from these. Furthermore, because a large number of Korean games were introduced to China during the MMORPG era, players are generally quite familiar with and receptive to the gameplay styles of Korean games.
By developing game content tailored to the habits and preferences of Chinese players and partnering with local Chinese game publishers to localize the games, we can better steer the direction of game development and publishing.
Generally speaking, games that are hugely successful in South Korea tend to be successful in China as well; however, to increase the likelihood of success, a fairly thorough localization process is still necessary.
(This article was translated by Su Cai of Game Teahouse. Please credit the source if you wish to repost it.)
原创文章，作者：茶馆小二，禁止转载：https://youxichaguan.com/en/archives/209987
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