The user base of Chinese gaming industry soared 20.6% year-on-year to 490 million this year, while the total revenue hiked 38% from a year earlier to 8.32 billion yuan ($1.37 billion), according to report released by China Game Industry Annual Conference (via Tech Sina).
With the rise of smartphone and other mobile devices, mobile gaming sector recorded 1.12 billion yuan of revenue this year and experienced an eventful year that can be summarized in three keywords, capital operation, distribution channel, and turnover (via Tech Sina).
Capital operation
Booming mobile game business has become a substantial attraction for investors. Shares related to mobile gaming concept surged and the heat even expanded to stocks remotely related to the concept. The market witnessed active acquisitions for mobile gaming companies and listing of game developers. The acquisition price of most mobile gaming companies range between 10 to 15 times of their annual net profits (source in Chinese).
Several industry practitioners agreed that it is not easy for gaming companies to gain profits from the crowded market. Some others predicted that the heat for this sector will cool down in the next year.
Let’s take a look at acquisition cases in mobile gaming industry:
- After acquiring a 100 percent stake in game developer Dovo Technology with 810 million yuan in February, Ourpalm invested a total of 2.55 billion yuan to acquire a 100% stake in Playcrab (1.74 billion yuan) and a 70% stake in Shanggame (814 million yuan) in August.
- Zhejiang Daily Media Group acquired two gaming subsidiaries under Shanda Group.
- Datang Telecom acquired a 100% stake in Yaowan.com.
- Huayi Brothers purchased 50.88% stake in Yinhan Technology for 672 million yuan.
- Alpha Animation, a leading domestic animation company, fully acquired 51 Pocket and 5agame, two online game developers, for 692 million yuan on aggregate.
- Youzu went public via backdoor listing.
- Shenzhen Zhongqingbao, an online game developer, acquired a 51 percent stake in two mobile game companies respectively, namely, More Fun Digital Technology and Small-tech respectively, for 357 million yuan and 87.47 million yuan
- Game developer IGG went public on Hong Kong Stock Exchange on Oct. 18, recording HK$4.02 billion of valuation on the debut day.
- Boyaa Interactive went public on Hong Kong Stock Exchange in mid-November.
- Forgame Holdings debuted on Hong Kong stock market on October 3.
Distribution channel
In addition to high-quality games, distribution channel is an indispensable part for the success of mobile games. The brand and promotion abilities of distribution channels are becoming crucial factors to attract attentions of users.
In addition to Shanda, online game developer LineKong launched LineKong game distribution center and Locojoy planned to kick off mobile game distribution platform by investing hundreds of millions of yuan.
Turnover
The number of mobile games that recorded tens of millions yuan of monthly turnover climbed from one in 2012 to eleven as of September 2013.
Monthly Turnover of Mobile Games as of September (via Tech Sina)
Moreover, Internet giant Tencent takes took steps into mobile gaming industry with simple, but highly competitive gameplay by releasing a number of WeChat-based mobile games, including Rhythm Master, Aircraft Fight, Link Link, WeRunner. Foreign games that received plaudits from Chinese gamers are Plants VS Zombies 2, Clash of Clans, etc.
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