LAI (www.lai.com) is a specialized game publishing and localization company, helping game developers and publishers achieve success worldwide by localizing and publishing their games in overseas markets.
In this article, Michelle Zhao (email@example.com">firstname.lastname@example.org), Managing Director for Greater China, and Rory Schussler (email@example.com">firstname.lastname@example.org), Special Correspondent, share their insights and perspectives on the emerging console market in China.
Earlier this January, China lifted a 13 year ban on the sale and manufacture of gaming consoles. This has generated great excitement about the future of the video game industry in China, but most of the big console players are cautious about forming plans for taking advantage of this opportunity. (Nintendo has said they have no plans so far for entering the Chinese market; Sony is making ambitious plans to sell 5 million PS4s by March 2014.)
We're still waiting on more details from the government on how the change in regulation is going to work. Restrictions on content are an issue for game designers. Piracy and the grey market are major concerns. The biggest challenge is how to adapt to the differences of the Chinese market.
Let's go back in time 13 years. Nintendo's Mario was almost as much of an iconic presence to Chinese children as he was to Americans. While China was closing its doors to consoles, in the rest of the world gaming was entering what is known as the sixth generation of consoles, where the major competitors were the Sony Playstation 2, the Microsoft Xbox, and the Nintendo Gamecube. From the beginning of the video game industry, games were targeted towards an audience that was mostly male and aged child to young adult. The target audience (a group which is now referred to as "hardcore gamers") demanded more complicated and challenging games with better graphics. Despite having the longest history in the industry and a line of well-known franchises, Nintendo was falling behind its competitors. When the industry continued with the same design philosophy working on a new generation of consoles in 2005, Nintendo went with a different strategy. With the Nintendo Wii, the company went against the conventional wisdom and discovered an entire new market that had been ignored entirely before. In contrast to the Xbox 360 and the Playstation 3, Nintendo released a less powerful console with a radically different motion control system. The simple and intuitive games were a hit with families and older generations. By saving money on cheaper hardware, Nintendo's sales outdid its competition so well that Sony and Microsoft both came out with their own motion control systems a few years afterward.
What's going on now is a similar situation. A market of over 1.4 billion people has opened up. According to IDC analysts, in the next few years, China is going to be the largest console game market once the ban is lifted completely. The big question is what kind of innovation or strategy can be used to capture the formerly ignored population. Quality localization is necessary to win Chinese gamers. There are a few aspects of localization to consider: cultualization, legal issues, monetization, and technology.
Besides artwork, the first thing to get gamers connected and immersed in your game is the UI that is written in their own language. When talking about the language “Chinese”, many people get confused by a few terms: Cantonese, Mandarin, Simplified Chinese and Traditional Chinese. Cantonese and Mandarin usually refer to dialects.
There are actually many different dialects in China. Cantonese is spoken by people from Canton area which is in the very south of China (many early immigrants in US are from Canton.) Mandarin is the national/official language, originating from Beijing and the Northeast of China. People from Taiwan and Singapore also speak Mandarin. Simplified and traditional are usually referring to writing systems. Simplified is used in Mainland China and Singapore, while traditional is used in Hong Kong and Taiwan. Many people who understand traditional may not read simplified very well, and vice versa. The good news is that since the language is concise, most of time, you don’t have to worry about the maximum length of the characters for UI design.
A good translation offers vivid story-telling and period-accurate language, which is essential to great gameplay experience. Providing subtitles or voice-overs in the targeted market are necessary for dialogue. In many circumstances, character and plot adaptation are preferred in order to appeal to the local culture. It is always necessary to fact check if historic events are included in the game. Asking the local gamers to verify the correct use of symbols and religious elements is often important during the testing phase.
Differences on cultural notions are not always obvious for game developers. Take colors for example - when Chinese people see red, generally they relate it to auspicious, happy and festive feelings. Its usage seems quite opposite in most western culture – it is associated with violence and blood. However, don’t assume that “Red is good luck” in all situations. A Chinese person could feel quite offended if offered a red pen to sign the bill in a restaurant – In historic times, only prisoners who were sentenced to death had their names written in red ink. Many Chinese people still believe it will bring them bad luck.
Raccoons are cute and used as a mascot in branding in China, but are considered pests in America. Dragons are another well-known example. There are plenty of other things to be aware of in culturalization: superstition surrounding numbers, display of dates, and Chinese holidays under the lunar calendar, etc. The best way to make sure you get it right is to consult with an experienced internationalization/localization professional working in the game industry. They will be able to make sure all the taboos are untouched and give you better alterations to boost your game sale in China.
Social media are very helpful and trendy tools to support game marketing, but Facebook, Youtube and Twitter are not available in Mainland China, even though they may be used widely throughout the rest of the world. China has a totally separate social media ecosystem, but it can be confusing at times (see the following chart showing the correspondence with other platforms). At LAI, we are experts at navigating China’s social media ecosystem and frequently help our clients with marketing initiatives in China.
Marketing opportunities vary in each area. In Taiwan, the game industry takes advantage of typhoon seasons since everyone stays at home and plays games. In mainland China, the busiest period is before Chinese New Year.
Compared to culture awareness, government regulations are even harsher. We talked about the color red in the cultural section earlier. In Germany, gore is replaced in green or blue color in games. Many other countries also have their ratings board to classify the games as appropriate for certain age group. Though China does not have a system for age rating, its censorship is also very strict. A month ago, Battlefield 4 was banned in China because the government viewed it as a threat to national security. According to Chinese video game information portal 17173.com, more than 40 foreign games are not allowed to be sold in China over the years.
Chinese game industry official website (http://www.cgigc.com.cn/list/79642814440.html)
provides video game publishing rules and regulations in China.
A few things for developers to note:
The current business model for console games doesn't fit China very well. In the existing console market, a game tends to cost around $20-$30 million to make, and sells to consumers at $60. Even cheaper and older games only drop to about a third of that, and 120 RMB is still very high for a Chinese gamer. The majority of Chinese gaming works on the free-to-play model due to the high amount of piracy. Most gamers who are interested in consoles have already purchased illegally imported systems, and are accustomed to playing bootlegged games. Consumers would refuse to pay the same prices that people do elsewhere in the world.
Different pricing models have already taken root though, and are becoming more popular. All of the current-generation consoles have online marketplaces where classic games or smaller and less expensive games can be purchased and downloaded digitally. The sale of downloadable content is becoming increasingly prevalent in big-budget console titles, although it is different from how the present Chinese market works (While the free-to-play model has had some success with American casual and mobile gamers, hardcore gamers tend to reject any game where players can pay for a competitive advantage.) What is important is that the market has started to move in new directions, and structures are already in place to accommodate a unique pricing model for the emerging console market.
(Copycat consoles in China)
Digital sales of games and content is promising for the Chinese market. Online systems are increasingly used to prevent piracy. Zero Power Intelligence’s research shows about 4 million consoles (including handheld) were bought in China from the grey market before the ban lifted in 2012. However, such consoles are unable to play anything other than local multiplayer, and cannot connect to other players. Establishing an official network for a console can prevent anyone playing on an illegally modified console or game disk, and ban them from the network. Digital sales on consoles also avoids the physical costs of shipping to retail stores, eliminates the middleman, and prevents resale of games.
Huawei unveiled its first Android powered game console Tron at CES in LV, only a few days after the government’s policy change. TCL also has plans on manufacturing its own console.
Domestic companies are making their debut in the console field, though Microsoft, Nintendo and Sony Computer Entertainment are considered by many as the best poised to benefit from the lifting of the ban on consoles. Console games require huge investments and long production times; companies without mature technology and industry know-how will easily fall.
Once triple A games become widely available, the landscape of the market will shift and the demand for high-tech visuals, sound and gameplay will increase. Ten years ago, 3D gaming became prevalent in the rest of the world, while 2D/2.5D is still the most common technology used among Chinese game developers (Cocos2D instead of Unity3D). Technology compatibility difficulties often occur when publishing in different platforms. Domestic companies usually have limited resources and talents on experienced console game design and publishing.
Domestic companies have advantages on user preference (stylistic, plot and trend) and game metrics. They also have more experience to modify gameplay of an imported game. Microsoft took the first step to form a joint venture with Chinese company BesTV in Sep. 2013. The future of the market should give an advantage to similar partnerships between established foreign companies and domestic designers, allowing both to profit from the synergy of the relationship. An alternative solution for companies that do not want to undertake such an extensive partnership is to work with experienced localization and publishing agencies.
The opening of the Chinese market to consoles brings plenty of challenges to ambitious game designers and console manufacturers, but the potential for rewards is commensurate. The first companies that work out a successful formula for marketing to Chinese gamers and establish themselves will gain a solid competitive advantage by getting in on the ground floor.
Since 1993, LAI has worked closely with many successful video game developers and publishers, helping to support their success in overseas markets by providing a complete range of game localization and overseas publishing solutions. For more information, e-mail us at email@example.com">firstname.lastname@example.org, follow us at @LanguageAutoInc, or visit our website (www.lai.com).