Interview with Happy Elements: More Lucrative to Build Games for International Social Networks

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Recently, I had the pleasure of dining with Happy Elements, Kabam, Kontagent, Joyport, and Offerpal at a dinner I helped organize in DinTaiFung at Shanghai’s Ritz-Carlton Portman Hotel. I had a great time dining and talking with two key employees of Happy Elements, Ronny Xu, Chief Product Office, and Mike Li, Director of Business Development. They introduced me to their Lead PR and writer, Charles Silverman, who also has been an avid read of MOBINODE. Given that connection combined with my interest in writing about a local Chinese Internet company, I took the opportunity to interview them for MOBINODE.

Background: About Happy Elements

On May 28th 2009, Happy Elements launched the virtual fishbowl genre on Renren.com with its first social game ever: “My Fishbowl”. On August 3rd 2009, Happy Elements launched the Traditional Chinese version of “My Fishbowl” on Facebook. Within two months it had attracted 2.4 million daily active users, and began the new wave of fishbowl games on Facebook. Their second game, “My Bar” was launched on the Mixi platform and within one month it has become the 2nd most popular social game on Mixi in terms of weekly active users. Happy Elements helped Facebook Taiwan become the #1 site in Taiwan with one in twenty users playing “My Fishbowl”.

1) Can you give a brief history of Happy Elements and introduce your team? How big is it? Any future plans for expanding into the US?

Our company was founded in early 2009 and all the early members of Happy Elements have social networki    ng backgrounds and experience in China.  Our first game was My Fishbowl and it began the fishbowl game craze. Our team has grown to more than 100 since then and we recently set up our Tokyo office. As far as expanding to the US, of course if the opportunity presents itself we would jump at the chance but for now we will continue to put out quality content.

2) Do you target local Chinese social networks such as RenRen?

Of course, we launched My Fishbowl on RenRen first, but being #1 in the China market is not our only goal. The social game industry has created a truly global opportunity especially for Chinese companies and it is something we are trying to take advantage of at home and abroad.

3) Is it more lucrative for Chinese companies to build games for social networks outside of China such as Facebook and Mixi?

It can be much more lucrative to traverse into social networks outside of China because sheer numbers dictate it. At this point in time western social game players have a lot of disposable income so it’s easier to make more of a profit. China and East Asia are certainly lucrative but our vision reaches beyond that. Social games are something that everyone can play.

4) For Facebook, which country or countries do you mainly cater to and why?

Today we are #1 in Taiwan, Malaysia and Hong Kong because we know the user bases tendencies and what they want.  We had a large part in making Facebook the phenomenon in Taiwan that it is today.  5% of all Taiwanese people play My Fishbowl daily and is the most successful social game in Taiwan. You would be hard presses to find a phenomenon like that anywhere in the world.

5) Are there core differences in design that make a game successful in the different social networks?

There’s not too much of a difference and certainly the gap is certainly smaller than most people imagine. We think the idea of a great and entertaining game is universal.

6) Are there cultural differences you have to account for users on Mixi vs users on Facebook? What about the cultural differences in specific demographics within Facebook?

We have English, Spanish, Italian, French and Chinese versions of our fishbowl game on Facebook all with variations to fit culture. Mixi is a smaller platform so they have very strict requirements regarding customer support. If you have customer complaints on Mixi they will ask you to change your game to fit the users’ needs, which is something that is desirable for everyone including the developers. Facebook does not impose these rigid guidelines. However, we consider our games are a service not a product so evolving to the needs of the user base is one of our #1 priorities.

7) Do you think the social gaming space in China and US is over-saturated with gaming companies or is there still enough market share for current and new gaming companies to grab?

Social gaming is still in the early stages so we feel there is still plenty of room for expansion. The invention of social gaming marks the first time that games can truly be mass marketed. With everyone able to play we don’t think the market has been over-saturated just yet.

8) I heard it can be quite difficult for foreign companies to enter the Japan’s market. Did Happy Elements have any challenges in forging a business relationship with Mixi and setting up an office?

Yes, it can be quite difficult. Setting up an office, finding talent, communicating with Japanese staff, customer support and customizing and localizing games all takes a great amount of effort. For example our Moon cake promotion celebrating the Mid-Autumn festival is very important to our Asian communities but is not something we could promote for western audiences. Viral distribution in Japan has also been a challenge. Strategies that are customary on Facebook will not work on Mixi because of the regulations they have in place to curb viral promotion.

9) Given that Happy Elements now caters to Facebook and Mixi, does Happy Elements host its games in server farms outside of China?

Yes, we house our servers outside of China.

10) With big companies like Zynga, Playdom (now Disney), and EA buying out smaller gaming companies, do you think smaller gaming companies have a shot at becoming large like Zynga? Or do you think most companies, such as XPD, will go the M/A route?

Zynga was just a twinkle in Mark Pinkus’ eye just a few years ago. It’s impossible to ignore Zynga and other large companies’ strengths in distribution and capital but the market is so young that anything is possible.

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