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China wants multiplayer, micropayments

Games developers targeting Chinese social networks should focus on mass participation and in-game transactions to churn profits, advises market analyst.
Written by Victoria Ho, Contributor on

Social games developers eyeing the Chinese market would do well to focus on multiplayer-styled games that incorporate in-game micro-transactions, advises a China-based analyst.

According to the latest estimates from Informa, Chinese social network QQ, has 300 million active users, and is fast catching up with Facebook's 350 million. In comparison, MySpace has about half the user base, Informa said in a report.

The number of Chinese broadband users is also expected to grow exponentially, given the current low penetration rate, which clocked at 18 percent in 2008. On top of that, social game revenues are expected to hit US$1.3 billion this year, according to a Lazard Capital Markets report, making Chinese social networks attractive platforms for games developers.

China Market Research's senior analyst, Ben Cavender, said in a phone interview that Chinese preferences in online games do not differ much from those of Western gamers, but developers should ride a few trends that have gained traction with Asian users.

Like FarmVille's success on Facebook, a similar game called Happy Farm--built by a Chinese games developer--is popular in China with some 20 million users logging in each day, showing that developers could easily take their games to the Chinese market, said Cavender.

He added that developers should take note of trends popular in China, such as users' openness to multiplayer, social-based games. While Facebook users may be more wary of adding strangers as friends, Chinese users are more open to adding people, he said.

This has led to users embracing more multiplayer games involving interaction with people they may not know, but are added on their Friends lists, explained the analyst.

According to Cavender, another trend that could turn good profit for developers is Chinese users' greater willingness to pay for virtual goods through micro-transactions. These could be in the form of clothing for their avatars, or virtual gifts.

"Developers targeting the Chinese market have to focus on providing a lot of in-game enhancements that will allow people to individualize themselves," he said.

Social networks such as Tencent's QQ, make an estimated 70 percent of their revenue from providing value-added services such as avatar customization, compared to advertising, he noted. The analyst added that this is a trend seen in reverse on Western social networks.

Byte Level Research co-founder, John Yunker, noted in an e-mail to ZDNet Asia, that developers should also consider censorship and cultural differences on Chinese networks.

He said Chinese users--and social networks--may balk at some of the more violent games on Western networks. A lot of games makers in China have also gone the educational route, avoiding violent content, Yunker noted.

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