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China’s $400bn Entertainment industry is Going Mobile

Two CEOs of China’s biggest mobile gaming companies, Shanda Games and OurPalm, which were among the first gaming companies to reach IPO in China, and the Executive VP of the Hong Kong-based China Renaissance Group – one of the most active VC companies in greater China – sat down for a fireside talk, at Beijing’s 2014 Global Internet Mobile Conference on how to reach the next 5 billion mobile entertainment users.

With the CPC aiming at doubling the entertainment industry to some $400 billion  by the end of 2015, mobile game publishers are positioning for “explosive growth” within an industry that is already experiencing three-digit growth figures.

Shanda Games CEO, Zhang Xiangdong, elaborated his company was ready to introduce 20-30 new games in China this year alone – and 50 globally, and characterized the industry as “hot” and with “explosive growth”

“Our strategy is to publish proven games from foreign markets and tailor them locally to the Chinese and Asian markets” the CEO said.

“We wish to have our own IP. Foreign games’ IPs can only provide us value to a certain extend. Once we learn about the foreign IP we can start developing our own, and we want to market our own IP- globally.”

The company is holding on to a strategy on partnering with successful mobile game publishers, limiting the risk of success on the Chinese market through a localization strategy.

“10 % of our revenue came from partnerships and we will have more of  that in the future. I think the key is to balance the revenue between foreign and proprietary IP”

“We have an extensive localization network across Asia allowing us to reach Asian markets including Korea and Japan”.

OurPalm CEO, Hu Bin added to the discussion saying:

“There are so many games on the market at the moment – some are making profit some are not – a concern for us is what type of games should we develop”

Renaissance Group moderator Eric Wen, noted that there was a fierce competition between PC, browser and phone-based games. With phone-based games revenue estimated to exceed the PC-based in very near future.

OurPalm CEO added : “How many games are successful a year? The success rate is 2-5% . Most of the [gaming] companies are now into their first or second year so they have to rejuvenate.Not all companies will be able to reach IPO – the capital markets are changing.”

Author: Nicolas Warburg

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