China is probably today’s most vibrant online games market in the world. The Chinese online games market with year-on-year growth of 39.5% in Quarter 2 2009, to $906 million. Tencent Holdings is the market leader with 20.2% market share, followed by Shanda Games with 20% and Netease.com with 12.7%. (Source: Analysys International)
A recent New York Times article outlined the upside of global online games and described how Chinese game makers are expanding beyond China and outmaneuver industry’s heavyweights like Electronic Arts and Activision Blizzard in the online space. The global online games set to explode, with revenue expected to reach $13 billion in 2010; China to capture more than 40% of the global online games market by 2011 (Samsung Securities). Typically, these online games are free to play; revenue mainly from micro transactions i.e. players buy weapons and accessories to advance faster to new levels. This is in contrast to the subscription model of the online games from Europe and United States. Chinese games makers are poised to benefit from the proliferation of broadband usage and slowly-but-surely shift toward online gaming.
Global Outlook, Local Flavors
Here’s a look at how a Chinese games being ‘exported’ to another country. Super Dance Online Extreme (SDO-X) is a Made-in-China online games. Its one of the most popular multiplayer casual online games in Malaysia, with over 150,000 unique active users. In Malaysia, the average number of users for a popular massively multiplayer online game is between 10,000 and 15,000; casual games with over 100,000 users are considered top-tier.
The game is published and localized by a Malaysian company, CiB Net Station Sdn Bhd. Besides Malaysia, CiB also publishes the game in Singapore, Thailand and Vietnam. A publisher typically host online games locally and manage the infrastructure required for the operation of the games. Game creator granted them rights to publish the games in one or more countries by the game creator. Revenue-sharing is made between with the game creator and the publisher. Besides SDO-X, CiB Net Station also publish other online games like Crazy Shooter Online, Risk Your Life and TLBB and all are accessible from its integrated online games platform, CiB Mall Portal.
In Malaysia, its competitors are STEP, High Street 5 and Audition. To remain ‘fresh’ and interesting, new edition of the game is released every 3 to 4 months, with changes to its theme and accessories, among others. As a publisher of the games, CiB Net Station requests the game creator in China to localize and customize elements within SDO-X to fit the local markets.
SDO-X is Guitar Hero for dancing. Players use keyboards to play (or USB dancing pad). Hitting the right notes, players earn points. Having hit a series of right notes (combo), the player earn bonus points. Skilled players can get clean full combination – meaning the player able to hit all the right notes. Below is a video of SDO-X players in action.
Similar to IRC environment, users can create public or private rooms. Anyone can access a public room, either to chat with others in the room or dance with others. Private rooms require password. Users range from 10 years old to 30 years old; the majority in the 16 to 23 years age bracket. Users can access the game from cybercafe or home with average time-of-play per user is 2 hours. In Malaysia, the game has recorded a concurrent users of more than 10,000.
Players can earn game points (CiB Points, or CP) by playing the games or purchase points from both virtual and physical distribution channels. On the Internet, users can buy the points via cibmall.net and also virtual points merchants like OffGamers, I1Game, ESA, Whoyo and Gogobase. Offline channels include 7-Eleven, Internet cafes, convenience stores and bookstores. There are over 2,000 selling points in Malaysia and over 100 in Singapore. Points can be used to buy accessories to beautify avatars (like suit and diamond ring) or buy tools like loud speaker (ability to broadcast messages across rooms).
Other than micro-transactions, it also undertake co-branding project with companies. SDO-X is one of the important components of the expansive, multi-dimensional branding campaign of Malaysian largest telcos, Telekom Malaysia, TM. The campaign, Everyone Connects, weaves itself into the SDO-X gaming experience. “This is the first time a song from a marketing campaign is included in the playlist of Super Dance Online,” said Danny Chang, Sales and Marketing Manager of CiB Net Station. “The TM campaign is a good example of a creative way to engage the online games community, specifically the SDO community.”
During the campaign period, the song is the default first song in the playlist. As part of its strategy to reach out to the teenagers and the early 20s, TM currently holding SDO-X Connecting Dancers Tournament 2009 in Klang Valley, Penang and Johor Baru. Finalists from each city will compete at the Everyone Connects Big Event, to held on November 21 2009 at Jalan Bukit Bintang, Kuala Lumpur.
With the proliferation of broadband usage, online gaming will continue to grow across the globe. It is becoming the social lubricant among the Generation Digital. The popularity of social gaming on Facebook, for example, epitomizes the upside of online games. For companies, the online games environment offers an exciting and vibrant new marketing interface and in coming months, we will see more innovative marketers creatively engaging the online games community.