Reported by TechWeb, Tencent was rumored to be cooperating with Zynga to bring the world NO.1 social game CityVille to China. It is a big news, as Tencent steps further into social gaming market with international market concerned and there is a huge opportunity ahead of Zynga.
A Big Win for Zynga?
Zynga valuation at $8-10bn now with blockbuster game over 100mn users after launching 43 days ago (Jan 2011 data), and Facebook registered users is reported ~500mn with 50% active. So let’s do a simple calculation here, Zynga CityVille players share / Facebook users is 100/250 = 40%. For Tencent QZone (assuming the deal is done on QZone, not on Pengyou, Tencent’s real-name network), there are 492 millions active users as of december 2010, so if Zynga’s CityVille can repeat its success and reach just 20% of Tencent’s active users, it will end up with around 100 millions new users for Zynga. It sounds a huge number, but it is not impossible as Chinese Internet is still entertainment-centric and people love games. And, 100 millions users is not a big deal for Tencent.
So there is no doubt that Zynga will win a huge user base. The question remains is about $$$. QQFarm, the very popular social game on QZone was reported to generate RMB 50 million (~$7.62 millions) per month. How much the QQ version of CityVillle will get and what’s the share goes to Zynga are the big questions we are expecting the answers?
Why CityVille and Why Now?
Why CityVille? Surely it’s the world No.1 social game by number of users. But why now? It might be coincidence, but the interesting part is that Kaixin001, one of the top Chinese social networks just launched its HappyCity social game several days ago and it’s reported that it attracted 570K users at the first day. As you may know that Kaixin001’s super rapid growth was built on its very popular HappyFarm social game and was really a threat to QZone. So is the partnership between Tencent and Zynga is also an urgent strategy for Tencent against Kaixin001? I am curious.
Chinese Social Networks, New Wonderland for International gaming companies?
In 2010, Zynga acquires XPD Media, a Beijing based social gaming developer studio founded by MIT graduate Andy Tian (ref TN interview with Andy) which became the China office. Since then, the team expanded rapidly with both aggressive hiring domestically and relocating managers from San Francisco headquarters. With facebook the primary distribution platform, the company has heavily invested on expanding to another platform, Tencent being the top target. PopCap, whose Plants Vs. Zombies is hugely popular worldwide including China, is in Shanghai for almost 3 years now expanding very fast with ~150 staff which almost double in past one year. Several days ago I visited its Shanghai office and had a talk with its several high officials flew in from its headquaters. They are super excited about Chinese social gaming market. I’ve also been told that they were working on some social games with partnership with RenRen and possibly Tencent too. With the growing popularity of Chinese social networks and Chinese entertainment-centric Internet culture, the international social gaming companies eagerly want some share.
Tencent’s International Strategy
We reported that Tencent was recruiting in Silicon Valley and we’ve been told that Tencent American team will particularly focus on social gaming which includes two parts, developing games on Facebook and bring popular social games running on international platform to China. It appears that Tencent is moving very fast on this international strategy: Zynga is the big one from U.S. market, and in the interview with GREE, we have mentioned its partnership with Tencent who wants all GREE’s mobile games running on its mobile platform.
Well, we may think too much about the partnership. My last which should be my first question is, from a player’s perspective, will CityVille add some Chinese elements when it’s launched? As you know, localization of a western Internet product is always the key for success in China.