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Summary:

Only a few years ago, South Korea dominated online gaming in Asia, but that’s been rapidly changing. From its growing local revenue, to the astounding popularity of Warcraft there, to reports that a virtual world currency is endangering the real one, China seems destined to become […]

Special ForceOnly a few years ago, South Korea dominated online gaming in Asia, but that’s been rapidly changing. From its growing local revenue, to the astounding popularity of Warcraft there, to reports that a virtual world currency is endangering the real one, China seems destined to become the center of Asian gaming. (And in subsequent years, perhaps the world.)

But how can Western game developers and publishers become players in that country, with its unique mix of authoritarian government and free-wheeling capitalism, and an emerging youth culture that few of us intimately know? One place to start might be a new report from Niko Partners, a research firm with offices in Shanghai and Beijing, which offers advice on navigating this new market, from applicable laws, like the country’s “nine areas of prohibited content”, to the government’s support for local game developers (often at the expense of foreign companies.)

I had a quick chat with Lisa Cosmas Hanson, Managing Partner at Niko Partners, to get a taste of her insight into the China market.

What three main points of advice would you give developers looking to break into China?
Lisa Cosmas Hanson

Lisa Cosmas Hanson: For publishers and developers who aspire to sell their games in China, the main points of advice are:

1. Find an excellent local distribution partner, such as an online game operator or physical distributor. One critical characteristic of an excellent partner is that the company has strong, long-standing contacts with the key officials in the government who regulate the importation of foreign games.

2. Be sure to understand the gamer audience to set realistic expectations for the number of users for your game, as that will dictate your profit.

3. Be patient.

What is the biggest mistaken assumption that western developers make when trying to develop for the Chinese market?

LCH: They forget to take into consideration that most gaming currently takes place in Internet cafés, and gamers smoke and talk and socialize while gaming. They need to make sure their games will perform well on the hardware and software specs of a typical PC in a typical café.

What are the nine areas of prohibited or sensitive content?

LCH: There are nine broad topics such as these listed in a law from the year 2000. They include anything that is detrimental to state security, anything that instigates discrimination, anything that discusses religion, anything obscene, and anything that disrupts social order.

What Chinese MMO should Western developers and investors pay close attention to, and why?

LCH: Perhaps they should pay attention to a Korean MMO soon to be launched in China, called Special Force, because it is a first person shooter and it may open up a whole new genre beyond RPGs among Chinese gamers. [Interestingly, according to The Korea Times, Special Force replaced Valve's Counterstrike as Korea's most popular FPS after Internet cafe owners balked at Valve's pricing policies. - WJA]

What particular concerns will user-created MMOs like Second Life and the upcoming Areae face in China?

LCH: We’ll have to see about how the content develops, as content is the most regulated part of the market.

Update, 1/13: The specific report, by the way, is “China’s Videogame Industry Regulatory Landscape” from Niko Partners, co-published with TransAsia Lawyers, available at Niko’s site.

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