The China Angle: China Tries And Buys Social Gaming

[In this latest China Angle column, Frank Yu examines the rise of social media in China, seeing Facebook-type sites thrive amid economic uncertainty -- while online games rush to implement social networking elements. But will the most successful social networks be the ones that retain ties to the region's prominent game biz?] One of the things that people in the game industry say is that the industry is in some way recession-proof because games are viewed as a cheaper alternative entertainment than eating out and going to expensive clubs. Of course, one still has to buy the appropriate console and software, but on a dollar-per-hour measure, it is still cheap. In China too, most games offer a cheap night's entertainment in an internet café or online at home, without the hassle and costs of KTVs, pricey gilded restaurants and Chivas VIP green tea lounge booths. And one of the best ways for non-gamers to try games during these difficult times is through social gaming. One of the latest trends in China has been the rise of social gaming through the social network sites. Whereas MMORPGs and games like Nexon's Audition seem to capture the imagination of the media and the game industry, the real story is that simple web and social network games have become very popular with the mainstream and nongaming crowd. Although Facebook and its near UI clone Xiaonei have been in China for more than a year, Facebook was late with a Chinese UI, and Xiaonei didn’t have a social game application platform ready until recently. Then came Kaixin001, which launched in April 2008, offering a social network centered around small games like Friends for Sale and Parking Wars. The rapid rise in users for Kaixin001's game-themed social network has caught the attention of China’s portals, game companies and investors. The social networks and virtual worlds in China have now rushed to put social gaming elements into their offerings. Zhengtu’s investment into social networking site 51.com highlights the ongoing combination of games and social networks. Even 56.com, formerly a popular video-sharing site, has recently reinvented itself as a social network with gaming applications. The traditional Chinese portals of Sina and NetEase have also created their own social networks with games in the last few weeks as well. In the midst of Chinese web companies like search engine Baidu and B2B giant Alibaba toying with entering gaming through social networks, what are the traditional online gaming companies doing? They are quickly building out their own social networks from their gaming communities and adding more socially-oriented gaming as quickly as they can backward-engineer them. The implications are clear that in China, games are more than just an entertainment space. They serve as social utility tools, media channels as well as potential community and ad networks. Social gaming brings in more mainstream users who would traditionally not call themselves gamers and gives them entertainment options that we would not have traditionally called games until recently. As many web entrepreneurs in China have begun to learn, although games may not be needed for an online offering, some game elements are necessary alongside a connection to gaming sites and social networks to draw users and revenue. In a time of economic uncertainty in the market and the tightening of credit for online startups, China’s large online game companies draw both users and profit from games year after year. Games are some of China’s first successful software exports as well. Some game designers scoff at these social games as not really being real games as well the way some have looked down up casual games in the past. However, the reality is that the market continues to embrace social games as the viral content that drives both users to try, come back and invite their friends to join as well. As social gaming continues to grow and embed itself into China’s online experience, it’s only a matter of time till the world’s largest wireless market feels the impact of these games on mobile web and social networks as well on smart phones and mobile devices. [Frank Yu is the Chief Strategy Officer for eMrazor, a Beijing based mobile game developer. Prior to his current position, Frank started and led the first China game team for Microsoft Casual Games and served as the first Regional Business Manager in Asia for the Xbox and Home Entertainment Division. He can be reached by email at [email protected].]