UCloud, the First Chinese Cloud Startup to Offer Game Hosting Overseas

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UcloudUCloud was the first to offer game server hosting service to Chinese online/mobile games with presences outside China. The Chinese cloud startup opened a data center in Hong Kong, for games with users in East & Southeast Asia, in late 2013 and is considering building another one in the U.S.

As a flock of Chinese mobile apps or services are marching toward overseas markets, a variety of third-party services are prepared to benefit from this trend. Chinese mobile advertising services have seen a significant rise in ad spend since the second half of last year.

Mobile gaming is especially an opportunity for a Cloud hosting service like UCloud, for there will be increasingly more mobile games and a considerable percentage of them will need virtual servers in the Cloud.

As developing smartphone-based games are comparatively easier, in part because popular mobile games are casual games or small games of other categories, a small team who are capable of developing those games can hardly afford the infrastructure like traditional servers every old gaming companies needed to purchase.

There were more than 900 mobile game development companies in China in 2013, according to an iResearch report. An average of 500 mobile games were launched each month in the year, as reported by Chinese startup database Itjuzi (report in Chinese). Not only are there more mobile game developers emerging, a number of existing online game developers or other mobile service developers are also shifting to mobile gaming.

Founded in March 2012, UCloud started off with the focus on online gaming. It’s not only because it’s one of the most profitable Internet businesses in China and the first that has seen meaningful revenue from mobile, but also that the founding team of the company consists of former mid-level managers from Tencent and Shanda, two of the top online gaming companies in China.

It’s no wonder the company claim they have a better understanding of the needs from Chinese game developers when it comes to Cloud hosting. Apart from a user interface tailored to Chinese game developers, UCloud offers competitive prices in order to compete with well-established global services like AWS.

UCloud received USD10 million in Series A funding from Bertelsmann Asia Investments and DCM in November 2013. It won’t be surprising to hear more funding announcements by the company, for one thing Cloud hosting service itself is cost-intensive; for another it aims to get listed in the U.S.