Chinese developers face down international competition through localization
Southeast Asia has an attractive market for mobile games. It has many players, a low cost of acquiring customers, wide English popularity, and cultural inclusiveness, which has created great market potential for Chinese mobile game developers.
According to the reports from Newzoo, a leading provider of gaming market insights and analytics, the revenue of mobile games (smartphone and tablet games) in 2019 from Southeast Asia was US$2.6 billion, a year-on-year increase of 17.4 percent. The figure accounted for 69.4 percent of the total revenue of the gaming industry in the region. Southeast Asia has become one of the fastest growing mobile game markets in the world, and Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam make up the major share of the region’s mobile gaming market.
The Southeast Asian mobile gaming market potential is so attractive because the mostly developing countries boast various advantages such as rapid economic growth, large population, and a larger proportion of young people. In the first quarter of 2020, downloads of mobile games in Southeast Asia totaled 1.82 billion, eclipsing India as the market with the most downloads.
As more Chinese brands of mobile phones such as Vivo, Xiaomi, Huawei, and Oppo have entered the mobile phone market of Southeast Asia, gamers in the region have acquired improved gaming experience with more affordable phones. Chinesebrand phones solved many problems to improve the mobile gaming experience.
Meanwhile, many Chinese developers are recognizing the opportunities in the Southeast Asian market. Large game developers like Tencent as well as emerging game companies like Shanghai Moonton Technology, Lilith Games, and YOOZOO Games are all looking to tap the potential of the Southeast Asian market.
From Export to Domestic Sale
Lilith Games is one of the finest representatives of emerging mobile game developers in recent years. From a little-known start-up to a popular global developer, Lilith Games is now a major competitor of Tencent Games and NetEase Games in the United States, Europe, Southeast Asia, and China.
Lilith’s success has been driven by the company’s strategy of releasing in overseas markets first before focusing on domestic promotion. In June 2018, a beta version of AFK Arena, a mobile game developed by Lilith, was released on the Google Play platform of Australia and Canada as well as in emerging market countries such as Vietnam, the Philippines, and Turkey. In February 2019, AFK Arena was officially released in the United States. According to statistics from Sensor Tower, the October revenues of the mobile game were US$30 million, making it the eighth best earning game in the world that month.
AFK Arena’s visual effects meet the preferences of foreign game players, and the game’s historical background and style generally adopt Western characteristics. However, to attract more players and their money, developers created some Chinese figures for different storylines and made deals to feature popular figures and events.
The mobile game Rise of Kingdoms is another example of the strategy. Rise of Kingdoms players can choose any from different civilizations available and develop heroes or leaders in the history of the chosen civilization. In late 2020, Rise of Kingdoms introduced the famous characters of Shin Sangokumusou 8, a Japanese mobile game featuring real Chinese figures from the Three Kingdoms Period (220–280). Such cultural components enhanced the game’s popularity in Southeast Asia, a region deeply influenced by Chinese culture.
AFK Arena and Rise of Kingdoms listed Lilith to a leading position among mobile game developers present in Southeast Asia. After the overseas success, the company began to promote both games in the domestic market and received wide recognition.
Localization for Local Markets
Lilith’s strategy is unconventional compared to the traditional practice of promoting games in the domestic market first. After attaining enough experience on game development and operation in China, most game makers would promote games overseas and localize them based on more complete development. Targeted localization would help games gain quick acceptance in the Southeast Asian market.
Chinese entertainment company Funplus has scored successes in regions such as Europe, the Americas, and the Middle East. In 2014, it opened offices in Vietnam, Indonesia, and Singapore to explore the market potential of Southeast Asia. Before the end of the year, Dot Arena, a Southeast Asian version of a famous Chinese card game developed by Funplus, topped download lists in Singapore and Laos.
At the same time, the quality of Chinese mobile games is also undergoing continuous improvement. Phenomenal mobile games like Honor of Kings and PUBG Mobile have been launched successively, causing the natural flow of production capacity from China to Southeast Asia. Chinese developers have adopted certain methodology and leveraged a wider talent pool, which has greatly increased the success rate of customizing games for specific overseas markets.
Mobile Legends is a 2016 multiplayer online battle arena (MOBA) game developed by Shanghai Moonton Technology. Because internet speeds in Southeast Asia are generally slower than in China, the company compressed the file for downloading. Developers added multiple language packs to the game to serve players in different regions.
Mobile Legends even has different game figures with different cultural backgrounds to cater to players from different countries. For example, the company added a figure called Gatotkaca for Indonesia, a character in local mythology. In the Philippines, Mobile Legends introduced Lapu Lapu, a Filipino hero in the battle against colonization.
Shanghai Moonton Technology has adopted different promotion strategies for different countries. Considering that most of Myanmar players are new to smartphones, the company specifically sought cooperation with local telecommunications operators and mobile phone dealers to pre-install the game on smartphones. The company also launched targeted promotions according to the festivals of different countries.
Meanwhile, Tencent’s PUBG Mobile and NetEase’s Terminator 2: Judgment Day have been launched successively in Southeast Asia. Arena of Valor, the international version of Honor of Kings, was also launched by the Singaporebased company Garena to enter the Southeast Asian market.
Compared with games from Europe, America, Japan, and the ROK, Chinese developers emphasize localization when “going out,” which has become an effective tool for Chinese teams to face down international competition.
The huge market potential of Southeast Asia has made it an important region for Chinese game developers. When ByteDance announced the acquisition of Shanghai Moonton Technology recently, some analysts called the move a step towards the Southeast Asian game market. It certainly testified to the Chinese tech giant’s optimistic attitude towards the prospects of mobile gaming.
By Liao Bowen
China Report ASEAN 