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The China Angle: The Chinese MMO Cola Wars
The China Angle: The Chinese MMO Cola Wars
November 27, 2006 | By Shang Koo

November 27, 2006 | By Shang Koo
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The latest edition of Gamasutra's regular 'The China Angle' column has Pacific Epoch's Shang Koo taking a look at Pepsi's deal with Guild Wars, part of the soft drink giant's attempts to steal World Of Warcraft and Coke's thunder, and and checks the availability of Wii and PS3 in China.

Return Of The Cola Wars

Chinese online game company The9 announced on Friday that it has partnered with Pepsi for promotions of its licensed online game Guild Wars. The two companies plan to set up Pepsi-Guild Wars themes in 10,000 Internet cafes between closed beta and start of commercial operations. Guild Wars is scheduled to start closed beta testing on November 29. Guild Wars will be The9's first game launch since Blizzard's World of Warcraft in May 2005. With WoW currently accounting for 99 percent of all revenues, The9 desperately needs another hit game to climb above its current image among investors as a one game company.

When World of Warcraft launched in May 2005, Coca Cola and Pepsi were neck and neck in China's cola brand image race. Coke was viewed as a more established brand, but Pepsi had a slight lead in star power, including China's most recognized athlete Yao Ming and a stable of soccer athletes and Hong Kong singers and movie stars. World of Warcraft took the cola wars to a new level.

Coca Cola signed with The9 for World of Warcraft. Pepsi had to settle for partnering with The9 rival Shanda, which was preparing to launch its new MMORPG Magical Land around the same time. Magical was not a success; a year later, Pepsi declined to renew its promotion partnership with Shanda.

How WoW/Coke Swept Japan

The9 and Coca Cola's joint promotion has been the most successful online game - soft-drink partnership to date in China. Coca Cola brought in Taiwanese pop band S.H.E. for a series of WoW themed TV commercials, severely bending (or even breaking) Chinese regulations forbidding game related content on TV. Since then, Coca Cola has brought in 2005 Super Voice Girl winner Li Yuchun and Olympics 110 meter hurdles gold medalist (and second most recognized athlete in China) Liu Xiang for the WoW themed commercials.

The cola wars in the summer of 2005 set off a slew of soft drink-online game partnerships. China's largest bottled water maker grabbed instant messaging service provider Tencent, marrying Wahaha's flavored milk drink with Tencent's MMORPG QQ Fantasy. Iced tea maker Master Kong partnered with China's largest casual game company 9you for its online music games, as well as China's largest online game company Netease for its dud Datang Haoxia. Netease's Fantasy Westward Journey - the most played MMORPG in China at 1.3 million PCU - is taken by Wahaha rival Robust, while Master Kong rival Uni-President has Kingsoft's JX II Online.

Coca Cola has a huge lead over every other soft drink maker in China with World of Warcraft and Nexon's Kart Rider, the most popular online casual game of 2006 in China. Pepsi is dead last, and hopes to reenter the cola wars with Guild Wars. Coca Cola was not pleased with its online game partner sleeping with its largest rival. According to unconfirmed reports, Guild Wars' closed beta date was delayed by a week due to difficulties with Coca Cola.

Console Hunt

Nintendo Wii consoles were available for purchase in mainland China less than a week after its launch in the US. Visits to the local game shops found US Wii version already across the Pacific to (mainland China's smuggling distribution depot) Hong Kong and then Shanghai store shelves on Wednesday. The consoles started out at over 4000 Yuan (8 Yuan = US$1) on China's eBay competitor Taobao, but prices have steadily decreased to 3650 Yuan for a Wii bundled with Zelda on Sunday. Prices are expected to drop sharply after the Japanese launch on December 2, when black market consoles no longer need to make the transoceanic journey.

Sony PlayStation 3 consoles are also available, and in much larger quantities. Sony launched PlayStation 3 in Hong Kong on November 17, and the consoles quickly made their way across the strait to the Mainland. 60GB PlayStation 3s are commonly found in game stores, selling for around 7000 Yuan, with the 20GB version available on Taobao for 5000 Yuan.

No console maker has launched any console systems in mainland China. Piracy is rampant in China. Every game store offers mod-services and pirated PlayStation 2 games are available for 5 Yuan each. No console maker has yet figured out a profitable revenue model that could sell hardware at prices comparable to smuggled consoles and software for less than 10 Yuan a game.

Wii titles have not been pirated yet, and smuggled games are selling for around 400 Yuan each, but only Zelda: Twilight Princess, Trauma Center: Second Opinion, and Monkey Ball are widely available. Some Wii units have been opened and are being sold without Wii Sports. PlayStation 3 titles are more widely available and selling for around 350 Yuan each.

[Shang Koo is an editor at Shanghai-based Pacific Epoch, and oversees research and daily news content on China's new media industries, with a concentration in online games. Pacific Epoch itself provides investment and trade news and publishes a number of subscription products regarding the Chinese technology market. Readers wanting to contact him can e-mail shang.koo@pacificepoch.cn.]


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