India bans Chinese games; Game engines in China; Cheatware market reaches 293m; IGN's China relaunch -- China Gaming News Roundup
Chinese mobile games are simply too good to be stopped right now. But their success is not irreplicable.
These days I’m jumping back into Honor of Kings/Arena of Valor. I’ve long been of the belief that mobile MOBA in many ways is better than MOBA on PC. The key difference here is that mobile MOBAs resemble more of fast-paced fighting games while PC MOBAs focus heavily on strategy. Overall, the gaming experience of PC MOBAs revolves much more on precision and strategizing but it is also somewhat tethered by its RTS roots.
The one feature that I absolutely love about mobile MOBAs is its virtual buttons which can expand into their own aiming wheels. The simple motion of pressing and dragging to release a skillshot is not only intuitive but also plenty satisfying. Obviously, hardcore console gamers grouse about the “flimsiness” of touch-screen buttons. Admittedly, I, too, oftentimes find myself longing for tactile feedback.
And that’s why we have mobile gaming controllers. But the current generation of mobile controllers leaves much to be desired. None of the current controllers can quite replicate the mechanic of the press-and-drag virtual buttons.
However, it appears that Flydigi is trying to solve this pain point with its forthcoming controller the Octopus 2.
I dig the idea. If it works as intended, it may offer a better experience than the forthcoming League of Legends Wild Rift with its somewhat dubious-sounding dual joystick setup.
Anyway, I’m just flagging this to show how far mobile gaming has come. And it is now driving hardware innovation. Off to the roundup.
🚫India bans Chinese games
India has finally moved to ban Chinese games such as PUBG Mobile, Arena of Valor, Knives Out, Rise of Kingdoms, MARVEL Super War. While the first batch of banned apps only included two games, over 1/3 of banned apps in this second batch — a total of 35 — are games.
While some earlier speculations held onto the wishful thinking that this Indo-China fracas may not burn all the bridges for Chinese apps, now the signal is pretty clear that all Chinese apps are not welcome. Chinese tech and games have taken over in India in recent years. And it is absolutely true that it is much easier for India to edge out Chinese games than to wean itself off Chinese electronics. In short, Chinese games have to go. Judging by the rate at which Indians are getting hooked on PUBG Mobile, it’s by no means a surprise that India had realized that its citizens’ yearning (or addiction) for fun shouldn’t be for the riches of Tencent and the like.
As a countermeasure, India is now calling for homegrown games. It goes as far as having Modi himself laying down a mandate.
(But obviously to his mind games are still just “toys”. For anyone who desire to be intellectually convinced, I recommend Matthew Ball’s essay 7 Reasons Why Video Gaming Will Take Over.)
That said, this will by no means end Chinese games’ dominance in India. For one, enforcement of the ban has been porous. Platform operators and ISP appear to be put in charge of enforcement. As such, the use of VPNs and side-loading can easily get around this ban. (Many in India still appear to be using TikTok.) The possibility of India erecting a China-style Great Firewall is still a distant and hazy notion at best. While the emphasis on cyber sovereignty will only strengthen in the long run, Chinese mobile games or mobile games with Chinese ties — the likes of Brawl Stars, Call of Duty Mobile, Pokémon Unite and League of Legends Wild Rift — will likely still be massively popular in India for a good while.
And truth be told, Chinese mobile games are simply too good right now. India has already adopted mobile gaming. There’s no putting the genie back in the bottle. So until and unless mobile games from other parts of the world get better (which is completely likely given the democratization of game-making tools these days), gamers will be gamers and find their way around bans.
As regards the larger scheme of things, although the Indian government said that the app bans are based on national security and data safety grounds, the consensus among experts is that they are born out of good-ole economic and geopolitical calculus.
As regards whether India’s ban on Chinese games may hurt Tencent, I’ve also written about it last month. Short answer: not much.
🕹 Game engines in China
Given how Unity is filing for an IPO and Epic Games is fighting Apple over its Unreal Engines and Fortnite, I figure this is as good a time as any to write up my earlier interview with the CEO of Cocos, possibly the third most widely used game engine.
Although little known outside of the mobile gaming community, Cocos, controlled by a Chinese company, still powers about half of China’s most popular games in 2020.
Game engines are big business. It will only get bigger. Game engines are now being used at the sets of shows like The Mandalorian to simulate virtual environments. Its industrial use has extended to architecture and engineering. One day they may become foundational in military tech. By that logic, we can expect China to start placing a more serious focus on homegrown game engines at some point in the future.
As things stand, Unity is the current front-runner in the market. The Deconstructor of Fun has a good piece breaking down Unity’s business. But overall, Unity is said to be powering over 50% of the top games worldwide. In China, Unity has a big presence. As far back as in 2014 (the last available public data), about a quarter of Unity users came from China. Today, the most popular Chinese game Honor of Kings is powered by Unity.
That said, Unreal has often upstaged Unity in recent years. I’m sure most of you have seen the Unreal’s demo at the PS5 event and taken note of Epic’s recent valuation of $17.3 billion. In China, Unreal is also stealing the show. Leading the charge is Archosaur Games which appears to focus on developing strictly Unreal-powered, hardcore 3D games on mobile. Indeed, the success of Dragon Raja — not only in China but also in Japan — has proven that massive 3D games on mobile will be the future. Archosaur Games, a partner of Tencent, saw revenue increased by 80% in 1H and its net profit reached 152 million yuan.
Funny story: Chukong Technologies which controls Cocos once wanted to acquire Unity but got rejected, according to Chukong’s CEO Chen Haozhi on Zhihu. Chen said he presented the idea to Unity’s CEO John Riccitiello in 2014 when Chukong was at the top of its game and preparing for an IPO. At the time, Unity was valued at only 300 million while Chukong’s valuation reached as high as 1.5 billion.
According to Chen, Riccitiello, formerly of EA, is as aggressive a CEO as any and immediately went on the offensive. In their first meeting, Riccitiello told Chen three things: a. Unity wouldn’t be sold and it would go public for 5 billion in 3 years; b. Cocos should merge with Unity, emulating how Yahoo and Masa of Softbank came together, such that Cocos could manage Cocos and Unity in China while the rest would go to Unity itself; c. Cocos would be wiped off the market if it didn’t pursue option b.
In the ensuing years, none of that happened. But Chukong didn’t manage to go public and neither had Unity. In 2017, Chen again met with Riccitiello. According to Chen, Cocos’ team did a PowerPoint presentation in the room and Riccitiello immediately assumed that Chen wanted to sell Cocos to Unity. Upon hearing that was not the intent for the meeting, Riccitiello erupted, accused the Cocos’ team of wasting his time and stormed off.
(Riccitiello’s fiery reputation is nothing new. His legacy was widely recognized but his tenure as EA’s CEO ended on a sour note. He also faced sexual harassment and unlawful termination charges filed by a Unity exec last year.)
Chen said he was appalled by Riccitiello’s short fuse, he said that Cocos did behave arrogantly at times during these meetings. And he admitted that Unity has a larger market share than Cocos in China.
💸 Cheatware market reaches 293m
Chinese gamers are notorious for cheating in games. And over the years the industry has grown tremendously. As per Tencent’s recent report, the industry has grown to be as big as 293 million USD in size.
What got cut out in the final draft of this story is an explanation as to why Chinese gamers often resort to cheatware in games. So let me supplement that bit of information here. There are essentially three major reasons.
First, China has a vibrant black market for video games. That’s because it wasn’t that long ago China’s gaming market was still dominated by pirated games, a phenomenon made possible by the high price tags of games as well as China’s bans — both old and new — on games. As such, the gaming industry is often driven underground in many cases.
Second, China also has a vibrant account sales/rental business. Ever since the internet cafe days, many Chinese gamers had already gotten used to buying and renting accounts to play in games (that’s because many simply didn’t own games and they played only online games). As such, there is a legend of professionals out there who would play day and night to level up accounts which they could later rent or sell for a profit.
Third, the emergence of live-streaming. Many now aspire to become gaming KOLs and you can only do so by being good at games. So many rely on cheatware as a crutch or they resort to buying high-level accounts to show that they are as good as they made themselves out to be.
On another note, Tencent has been active in highlighting the problem of cheatware in recent years. Besides protecting its games, appeasing frustrated gamers and educating regulators on the issue, Tencent would also at times use this as a marketing pitch for its cloud gaming solution to game developers. This all ties in with Tencent’s plan to not only be a game publisher but an all-encompassing gaming service platform in the age of cloud gaming. As a service company, Tencent can profit from services which help games filter chats, weed out cheats, etc.
🚀 IGN's China relaunch
IGN is coming to China in a tie-up with Tencent.
There are three aspects about this story I want to quickly unpack here. First, let’s address the elephant in the room. Tencent’s involvement suggests that Tencent is perhaps interested in using IGN China to help promote its console game business in China. Yes, this is my speculation but Chinese game company execs have been telling me that they are now in need of influential media partners. Anyway, it doesn’t take a scientist to figure out why. Tencent is the distributor of the Nintendo Switch in China. Indeed, Tencent may want a media partner which wields significant influence in the console gaming space and IGN fits the bill. Additionally, the current game media landscape in China is mostly controlled by pirated-game-platform-turned-media websites. It behooves Tencent in many ways to divert traffic away from many such sites.
A bit of a side note: although Tencent’s version of the Nintendo Switch in China has widely criticized as it is neutered by regulators for compliance issues. The Switch has a bright future in China in the long run. This is evidenced by the fact Ring Fit Adventure is selling out everywhere in China as this issue is being written.
Secondly, we have to address IGN China’s previous foray into China, which was quite a bizarre and disastrous one. The brand was licensed to a company ostensibly called 北京岸基恩娱乐科技 Anji360.com. The IGN China site carried some translated pieces and didn’t exactly catch on in China. But more strangely, the company quickly found itself in a scandal in which many IGN China employees took to Weibo and accused the company for delaying the payment of wages. The site soon suspended services and the IGN China brand was in a complete shambles.
Last but not least, I want to touch on Charles Young. Charles is a well-known figure among the Chinese gaming circle. He is most known as the editor for Gouhuo, Tencent’s new gaming news app. Before that, he was the editor for magazine Ultra Console Game so he’s a bona fide hardcore gamer. However, his reputation took a major hit during his stint with Fuze Game, a company which made a lot of noise setting itself up as China’s own console maker back in 2016 but quickly shuttered after its Tomahawk F1 turned out to be a major flop.
Judging by online reactions to the IGN relaunch news, it seems that gamers and netizens are not super high on Charles at this very moment. Besides how Fuze Game had made him look like a fool, Charles drew a lot of heat for being too vocal and divisive on Weibo. In fact, he has recently become blocked on social media in China for making too many snarky, slightly off-mainstream comments.
That said, I think Charles is a good fit for this job. Without a doubt, he is a very respected and well-connected game media veteran.
📖 My reading list
How Lumikai, India’s first gaming-focused VC fund, plans to unearth local winners like Ludo King
Marvel's Avengers shows how a “beta” can be a pitfall
Internet giants are going after esports clubs. We’ve seen 4,306 new esports companies so far (CN)
Archosaur Games saw revenue increased by 80% in 1H, looking to launch 8 games by 2022 (CN)
Revenue reached 8 billion yuan, 37Games focuses on going overseas (CN)
Older stories:
7 Reasons Why Video Gaming Will Take Over
John Riccitiello’s legacy: EA survives, but its hit points are dangerously low
Reviews:
Iron Harvest Single-Player Review
Tony Hawk's Pro Skater 1+2 Remake Review
High Score review: Netflix’s story of gaming’s “golden age” is honestly solid