Qihoo’s new search engine emerged nearly one year ago.

China’s Qihoo (NYSE:QIHU), a software maker and web portal turned search engine, has reported its Q1 2013 financials this morning. The company hailed a record number of users across its services – a total of 457 million active users in March 2013 – but saw mixed financial numbers.

Revenues were up slightly quarter-on-quarter to $109.9 million (up 58.6 percent in the past year). Operating income fell to $6.8 million in Q1, nearly half that in the previous quarter (and down from $14.4 million a year ago). Operating expenses crept up yet again to hit $89.2 million in the first quarter, nearly double the expense of Q1 2012.

Qihoo, which launched its search engine last summer to capitalize on all the traffic from its web portal and Windows PC software, also revealed a bunch of updated numbers:

• Total monthly active users of Qihoo’s products and services reached a record 457 million in March 2013, compared to 411 million in March 2012.
• Monthly active users of Qihoo’s ‘360 Browser’ across PC and mobile reached a record 332 million in March 2013, compared to 273 million at same point last year. User penetration of these web browser apps in China hit 69.6 percent.
• Average daily unique visitors to Qihoo’s “personal start up page” (hao.360.cn) of paid links rose to 94 million. That web portal generated approximately 489 million clicks.
• Paying users of Qihoo 360’s web game platform were approximately 281,000 in Q1.

Qihoo’s report made no detailed mention of the progress of its search engine (said by CNZZ to be at 12 percent market share in China), nor made any reference to all the company’s iOS apps being banned by Apple. Those issues will surely come up in the conference call later.

Qihoo expects a stronger second quarter with revenues between $142 million and $144 million.

See the full earnings report on the Qihoo IR homepage.

The new page asks players “How else can you play an FPS?” and then presents them with a eight this-or-that voting options, each relating to a particular element of gameplay design. The percent of votes each option has accrued is prominently displayed, and while the site doesn’t explicitly say so, it certainly implies that the higher-voted options will be implemented into the game.

If Netease really plans to abide by these votes — we’ve contacted the company for comment — then I believe this will be the world’s first FPS from a major development studio to crowd-source such huge aspects of its game design. It’s a bold move, and one that likely means we won’t be seeing this game anytime soon, as based on these questions it seems like the game must be in a very early phase of development.

So what choices are gamers being given, and what are they choosing so far? The page has only been up for a day, but it appears to have already attracted thousands of votes, resulting in these choices:

Aim-assist vs. pure skill: Here, 83.69 percent of respondents so far have voted for having some degree of aim-assist to make shooting more precise. This shouldn’t come as much of a surprise as many modern shooters including Call of Duty and Battlefield have aim-assist mechanisms so that aiming is not 100 percent manual.

Progressive characters vs. static characters: Here, players are pretty torn, with 45.67 percent voting for progressive characters that can be leveled-up, specialized, and personalized, and 54.32 percent voting for static characters whose only differences are their external appearances (which makes the game fairer in multiplayer matches).

Responsive maps vs. static maps: Players overwhelmingly (89.09 percent) prefer responsive maps that may change over the course of gameplay (for example, a hole gets blown in a wall or a building collapses).

Story-based single player vs. arcade-style single player: When asked whether they preferred a single player mode with characters and a story or an arcade-style single player mode that just focuses on fun carnage, voters so far definitely prefer the game to tell a story (87.71 percent).

Large-scale battles vs. small-scale battles: Do players want Battlefield style engagements, with huge maps, vehicles, and long range engagements, or Call of Duty style smaller maps that are more focused on speed and foot battles? Voters so far prefer the former (82.74 percent).

Varied actions vs. traditional actions: Players have thus far indicated that they’d prefer playable characters to have varied actions (running, crouching, walking, creeping, assassinations, etc.), rather than have a game with fewer actions that’s more focused on pure speed and skill (83.9 percent to 16.09 percent).

Character classes vs. All-around warriors: Voters are split on whether they want different character classes with different skill sets (for example, a medic whose stats are geared towards healing, a heavy whose stats are geared towards causing maximum damage, etc.) or characters who are equally capable of doing anything so long as they have the right equipment, with the former option thus far garnering 46.98 percent of the vote and the latter 53.01 percent of it.

Upgradeable guns vs. standard weapons: Having ‘standard’ guns that can’t be upgraded ensures fairness and emphasizes the differences between each weapon, but so far gamers still prefer weapons that can be modded and upgraded, with 83.73 percent of respondents voting for that option.

As you can see, some of these options certainly indicate that not much work has yet been done on the game beyond the apparent creation of a new game engine (for example, the fact that Netease is asking if gamers prefer a story mode or an arcade mode for single player would seem to indicate developers haven’t really started work on the single player sections of the game yet).

We’re not completely certain that Netease is totally committed to abiding by these votes, and we’re hoping to hear back from the company soon with more details about how the game will be designed. If major design decisions like this really are being crowd-sourced, that would seem to be an industry first, but I wonder whether it will make for a good game. There is always the risk that when you try to please everyone you end up pleasing no one, and the crowd-sourced approach to design could certainly lead to a Frankenstein-style final product with lots of interesting bits but no cohesive whole. Either way, it’s a fascinating idea and we’re going to pry as much detail as we can out of Netease about it, so stay tuned!

China’s biggest web company by revenue has just posted its Q1 2013 financial report. Tencent (HKG:0700) reports rocketing revenues and profits for the whole group, which covers products across social media, gaming, advertising, e-commerce, media, and more. Tencent’s quarterly revenues hit US$2.161 billion, up 11.5 percent on Q4 last year, and up 40.4 percent from the same period last year; net profits reached $649.4 million in Q1, up 17.3 percent QoQ or 37.4 percent YoY.

Tencent makes China’s biggest social export, WeChat. In today’s report, the company revealed that it now has nearly 195 million monthly active users on the social messaging app (194.4 million to be precise); that’s up 23.1 percent on the previous quarter, which is up 228.4 percent in a year. WeChat has over 300 million registered users, and is likely to exceed 400 million some time this month. As we noted last week, WeChat’s significant number of active users puts it close to surpassing Whatsapps’s 200 million actives, though about 90 percent of WeChat’s user-base is within mainland China, so it’s not that much of a global success yet.

Other social numbers:

• QQ instant messenger hit 825.4 million monthly active users, up 9.8 percent on Q1 2012. QQ’s peak simultaneous users reached 173.0 million, which was down 3.3 percent across the year.
• Qzone, the broader social network around QQ, got up to 611 million monthly actives, up 5.9 percent in a year.
• QQ Game Platform saw peak simultaneous users of 9.2 million, up 5.9 percent over the same period.

In other financial data, value-added services accounted for 78.7 percent of revenues in Q1 this year, reaching $1.72 billion. That’s up 13.6 percent from the last quarter. Online gaming revenues increased 19.3 percent over the same period to amount to $1.21 billion. That was mostly down to China-area gamers on things like Crossfire, and was boosted by increased gaming activity during Chinese New Year.

Founder, chairman, and CEO Pony Ma says in today’s report:

During the first quarter of 2013, we saw broad-based growth in user engagement and revenue across our key activities. This growth has enabled us to fund investments in longer-term opportunities such as WeChat international user acquisition, online video content aggregation, and e-commerce footprint expansion, while maintaining a healthy expansion rate in earnings and cash flow. We saw both strategic and financial benefits from our portfolio of investee companies, including a further special dividend from Mail.ru.

We will continue to invest proactively in innovation and technology, and to cultivate our open platform, in order to capture the mobile opportunities ahead and strengthen our position as the leading internet platform company in China.

WeChat hasn’t really been monetized so far, but Tencent will soon endow it with social gaming integration similar to what has been done by rival apps Line and KakaoTalk.

Find the full report on Tencent’s investor relations page.

We are reviewing our business to optimize our global game development operations through a process of selection and concentration, and this has led us to the difficult decision to close our China office and studio. GREE Beijing has developed several excellent games and the talented people who made up its staff have made a valuable contribution to GREE. We regret that we have had to make this closure and wish all the best to everyone affected.

Japan’s GREE has been a dominant force in mobile games on its home turf, and over the past few years has overseen an aggressive expansion overseas. But late last year the company was forced to lay off employees at its North American office, and now it has apparently shuttered its China branch completely.

We have contacted GREE for comment on this story and will update it if we hear back.

According to an internal announcement at GREE China yesterday (as reported by Sina Tech), the branch will totally cease operations on June 28th, and all of its employees will be laid off. The company has not yet announced a compensation plan for employees, but it should have plenty of time to roll something out over the next month and a half before the shutdown actually takes place.

The reason for GREE China’s demise — and the company’s declining fortunes in general — is generally believed to be its failure to recognize and commit to the global movement towards smartphones quickly enough. 60 percent of GREE’s revenue is still coming from feature phone users, but feature phone users are getting scarcer and the company has not carved out a dominant position as a smartphone gaming platform on either Android or iOS.

Of course, this is not to say the company is about to collapse. GREE is still projecting a net profit of around $300 million this quarter, but then again, if the company’s projections are correct it will be the first time since 2008 that GREE has seen its profits drop. It seems likely that given this shift, the company has decided to concentrate on its strengths on its home turf of Japan and reduce the degree to which it’s extended overseas. That’s probably a smart business move, but it’s a bummer for everyone working in the GREE China office.

Related: GREE’s founding story

(via Sina Tech)

1. League of Legends
2. Sudden Attack
3. FIFA Online 3
4. Aion Online
5. Blade & Soul
6. Starcraft
7. Lineage
8. Warcraft 3
9. Cyphers (Apologies, this one doesn’t have a Wikipedia entry in English)
10. Diablo 3

More interesting than the list itself are the statistics Gametrics tracked on what percent of the internet cafe gaming market these games hold, which show that League of Legends is utterly dominating everything else with a whopping 39.99 percent of the market. By contrast, second-place Sudden Attack has less than 10 percent, and third-place FIFA Online 3 barely has 5 percent.

It’s also worth noting that when comparing this to a similar recent list for China, League of Legends is the only point of overlap. The lesson there: Asian gamers love League of Legends (not that that’s a surprise). It’s also worth pointing out that some pretty old games feature on both China’s and South Korea’s top games lists; clearly Asian gamers are less picky about having the latest graphics and physics than their pixel-peeping counterparts in the West.

(Gametrics via 17173)

I’ll say it again: if there is one mobile game out there right now that people in Japan will remember in 10 years, it’s Puzzle and Dragons.

The game, which boasts 13 million registered users in this country (10 percent of the population), has generated US$113 million in sales in April.

Since late last year, maker GungHo’s market cap at the Osaka Stock Exchange kept rising and rising – to about $10 billion – to the point that the company is worth more than Mobage operator DeNA, GREE, and Zynga combined.

The Korean version of GungHo’s money-raking game.

And today, GungHo (3765.OS) shares jumped limit-up by 300,000 yen to 1,342,000 yen (up 28.8 percent) in just a few minutes of trading, until the stock was bid-only.

As a consequence, the company’s market cap now reached 1.54 trillion yen, which translates to $15.1 billion. With this number, GungHo topped Nintendo’s market cap of US$1.53 trillion yen (or US$15.0 billion).

The US$15.1 billion market cap is also higher than that of Nikon, Fujitsu, Isuzu, Sanyo, All Nippon Airways, Sharp, or Mitsubishi Motors.

It’s a new world we live in.

Other market caps (Monday, May 13 at 11:30am JST):

• GREE: $2.8 billion
• DeNA: $3.6 billion
• Zynga at $2.6 billion
• Electronic Arts: $6.7 billion
• Activision Blizzard: $16.7 billion

GungHo’s new owner SoftBank can be very happy.

Everybody loves a good mystery. And it seems the folks at Netease have gotten people talking about one with this teaser page for a new first-person shooter. More about the game will be revealed next Tuesday, but there are some very interesting clues on the teaser page (pictured above).

First is the series of “passwords” used to “hack” into the computer. The three passwords that fail initially are CryEngine, Unreal, and Frostbite. As hardcore gamers know, these are the names of three of the biggest and most modern FPS game engines in the world, and have been used for many of recent globally high-profile FPS titles. But the computer on the teaser site rejects those “passwords” and instead chooses Dynamite. Since that’s not the name of an existing game engine, we can only assume that Netease has developed its own engine for use with this upcoming game.

While it could just be marketing hype, it was definitely bold for Netease to put this apparently engine in the same league as CryEngine, Unreal, and Frostbite. If it really is on that level — and that’s a big if — it could signify an attempt by Netease to move beyond China, or at least to license its new engine to the global game developers who are now using CryEngine or the Unreal engine for their games.

We can also make a few guesses about the game itself from the teaser page. Given that the gun and helicopter on the desk appear to be pretty modern, we can assume the game takes place in or around the present day, and that it probably also involves some vehicle combat. The bloody biohazard symbol is interesting, too — could the game’s plot concern chemical warfare of some kind?

There are also a few guesses we can make about the game based on Netease’s past record of game development. While it seems clear this game is a first-person shooter, Netease’s most successful games have been MMORPGs, and it seems likely that this game may include some MMORPG elements, although it’s hard to say exactly what. More interestingly, though, many of Netease’s biggest games include elements of Chinese history and mythology. Will this shooter also include some China-specific elements to make it more appealing to the hometown crowd?

Whatever it turns out to be, the game is facing what is likely to be stiff competition from the impending release of Call of Duty Online, Activision and Tencent’s interpretation of the global smash-hit shooter franchise as a freemium PC game for the Chinese market. The game is coming out soon, and while I’ve argued that hardcore Chinese gamers may be put off by it, it’s still likely to be very popular, and Netease’s game will need to be pretty impressive to turn heads away from the CoD spectacle.

Japan-based social gaming platform DeNA (TYO:2432) has just rolled out its Q4 and full-year 2012 financials. After an expensive previous quarter in which profits dipped, the same thing happened again for DeNA in Q4 (up to March 31st 2013) with an operating profit of $184 million, which is down from $216 million in Q3, but up three percent on the previous year.

Quarterly revenue was $528 million (up 22 percent from same time last year), but below Q3’s record-breaking figure.

Things are rosier for the whole of the 2102 fiscal year, in which DeNA brought in a record $2.04 billion in revenues and $775 million in profit. Here’s the key table:

DeNA chose its quarterly highlights as:

• MobaCoin consumption in Japan was 58.3 billion yen ($588 million), 2.5 percent lower than the previous quarter.
• Overseas MobaCoin consumption showed strong and steady quarter-to-quarter increase, approaching $70 million.
• Increased user engagement drove monetization growth. As a result, Mobage titles occupied top ranks in US Google Play’s top-grossing chart.
• DeNA and Nexon formed a global business alliance to bring new Nexon-developed games to Mobage networks.
• Groovy, DeNA’s new music player app was launched in Japan.

For the current Q1 2013, DeNA expects to make $175 million in operating profit (UPDATE: Corrected that figure. It’s for Q1 only, not FY13).

See the full stats on DeNA’s IR homepage.

There’s been some buzz on the Vietnamese internet lately concerning Nhac Cua Tui, one of Vietnam’s premier music listening services. Nhac Cua Tui has two main domains, the .com domain, and the NCT.vn one. Nhac Cua Tui, which means “my music” in Vietnamese, has become famous for its almost Last.fm-like recommendation engine and music distribution channel. The service has been promising enough to receive funding from CyberAgent Ventures early last year.

But the latest controversy concerns Nhac Cua Tui’s NCT.vn domain, which is a platform for game developers and gamers to post their games online to share. It turns out that quite a few of the games posted on the site are unlicensed – meaning they’re pirated. As reported by Ictnews, Nhac Cua Tui has taken the position that they are not a game distributor, but just a platform for sharing.

This has caused a bit of a stir. In fact, licensing and legal issues have been getting more and more serious in the online space here recently, with Coke pulling its ads out of VNG’s Zing, and Bao Moi under fire from local Vietnamese newspapers for stealing content. In my opinion, it’s great. It’s forcing online and offline companies to take patents and copyrights more seriously, and the end result would of course be more support and respect for truly innovative ideas.

In light of this, I called up Nhan The Luan, CEO of Nhac Cua Tui, for more details on Nhac Cua Tui’s position. He said:

The central issue, as mentioned before, is that NCT.vn is a platform not a distribution channel. We’re involved in curation, so it’s not a central issue for us. Of course, what we will do is become more rigorous about what content goes on the platform and what doesn’t.

Translated chart via youxistory.com

The rankings are apparently calculated based on the scores of individual students, and I suspect it’s not an extremely precise system, but even so, it’s interesting that some of China’s most elite academic schools are also the best schools at DOTA. I guess when you work hard, you play hard too! It’s also worth noting that Wuhan has two schools in the top six (though having once visited Wuhan, I can’t say I’m surprised students there prefer to stay indoors playing computer games).

(QQ Games via Youxi Story)

Tencent’s Pony Ma (sat on right) takes questions from the host and a panel of industry experts.

This afternoon at the Global Mobile Internet Conference (GMIC) event in Beijing, Tencent’s ‘Pony’ Ma Huateng was on stage speaking about his company’s strategy and future. The first question was about the struggle Tencent’s WeChat has with China’s mobile telcos, which is one of the hottest tech topics in China right now. But Ma seems confident that WeChat isn’t going to charge users.

Ma was questioned how WeChat will be monetized by Tencent (HKG:0700). There are quite a few methods – stickers and games – as the onstage panelists suggest. (Line and KakaoTalk have been doing all these so successfully). Ma agrees that these are indeed the ways to make money for WeChat. Another way to make money, he explains, is via offline to online services and also digital products, such as an artist who could share their art on mobile platforms like WeChat. That sounds a lot like digital publishing which Line and KakaoTalk recently started doing.

The next question asked was if QQ, Tencent’s traditional IM service, will cannibalize WeChat. Pony explained that their functions are different, for example push-to-talk and voice messaging never existed on QQ. QQ’s active users are double that of Wechat. Ma says that companies can’t just have a department that helps desktop products turn into mobile products. Rather, there must be a department that needs to focus entirely on building for mobile from scratch.

Ma says that mobile is a very tricky industry; despite the existence of a lot of giant web companies, many of them may not be winners in the end. Tencent is always not at the start of the wave nor at the end. It always comes in at the right time, the host states.

The onstage host commented that Tencent is winning on every front on the Chinese web, especially mobile. But Ma humbly said that search and e-commerce aren’t successful points for Tencent. Indeed, it’s Soso search engine, and its various e-stores, like Paipai and QQ Buy, have always struggled.

Learning from Facebook

Ma says that overs the years, Tencent learned that it couldn’t do everything and will be working with third-party companies closely in the future. He also confirms that WeChat will have social games and assures game developers that Tencent will not be providing their own games. Ma now sees Tencent as a platform company rather than a content company.

The founder and CEO adds that Facebook is the first successful open platform on the web, and that emerged back in 2007. Tencent only got into this kind of space in 2009. Ma says that doing an open platform is technically challenging and must be done with care. So it took Tencent two years, starting in 2011, before Tencent really pushed itself as an open platform company. If I’m not interpreting this wrongly, Tencent seems to be prepping hard for its mobile gaming platform despite seeing KakaoTalk and Line out in the market already.

Will Tencent go into hardware? Ma says he is interested but doesn’t have a clear plan on hardware. One thing’s for sure, Tencent isn’t going to work on a phone. There’s no clue about Tencent doing a Google Glass-like device either.

Pony Ma is also famous for testing the user experience of his own products. Ma explains that he will try to imagine himself as an average user or a not so savvy user to test applications. He says that besides providing a great user experience in its applications, Tencent’s success factor is to keep innovating.

Competition, innovation

WeChat went global in 2012. It now has nearly 400 million users – but most are in China.

Commenting on Alibaba’s investment in Sina Weibo last week, the Tencent CEO says he doesn’t feel threatened; rather, he feels that it is only natural. Instead of clashing, Ma suggests that the real challenge is to keep innovating and create new technologies to serve people better.

When the host asked the panelists if WeChat can help Tencent get on the global stage, all but one person raised their hands. Ma himself feels 50/50 about this opportunity, noting that there are strong competitors overseas – a reference, I believe, to Whatsapp and Line. But as Ma has always said, mobile has given Chinese companies a good chance to innovate and succeed globally.

Ma actually met the NHN Line CEO this afternoon and revealed that there might be a way to collaborate. Both of them agree that once a chat app is popular in the country, it tends to stick on unless something major crops up. Ma explains that in the future, there could be more collaboration. But for now, Line and WeChat are competitors both in China and in the international markets (also note that Tencent has invested in rival Korean-made app KakaoTalk). And Ma believes that to do well globally, localization is important. For example, some aspects of WeChat in China (where the app is called Weixin), such as the ‘drifting bottle’ with secret messages that go out to random people, have been removed from international versions of the WeChat app.

Ma concludes by saying that he is enjoying the journey now as Tencent’s WeChat expands globally. And, regardless of the result, win or lose, he will be giving his best shot to put Tencent and Chinese tech companies on the global map.

This is part of our coverage of GMIC 2013 in Beijing, running today and tomorrow (May 7 and 8). For other stories from this event, click here.

We know that Tencent is developing a social gaming platform for WeChat, its popular messaging app, but so far we’ve not heard about its mobile gaming ambitions. Now, vice-president of Tencent’s Game Division Ma Xiaoyi has explained how WeChat’s gaming features will be influenced by more than a decade of Tencent’s experience in both casual and hardcore gaming, and suggests that the platform will be integrated with QQ, the company’s ubiquitous instant messenger service that already has game and virtual currency elements and also other core mobile products including its Android store, MyApp.

Talking today at the Global Mobile Game Confederation (GMGC) event in Beijing, Ma added that WeChat will be aiming its gaming platform initially at Chinese mobile gamers who he predicted to be at 300 million by the end of this year. Basically, that’s everyone with a half-way decent smartphone. That makes the Chinese mobile gaming market, Ma reckons, worth around RMB 60 billion (about US$9.68 billion) in a year.

Ma shared more about Tencent’s unified platform (translation ours):

In the future, Tencent will release a unified mobile gaming platform. This platform will comprise of Tencent’s main mobile applications. Through this unified platform, we can create an excellent platform for our developers to bring the best games to our users.

Echoing CEO and founder Pony Ma’s view, Ma believes that mobile has provided a great platform for Chinese companies to rise. He says in his speech today that China was 30 years late on video gaming compared to Japan and US, 15 years late on PC gaming compared to US and Europe, and five years late on web gaming compared to Korea. But for mobile gaming he believes that China is finally on the same starting line as other nations. With Tencent’s loyal gamers, reach, proven business model, and resources, Ma is hopeful to work with China’s most talented mobile game developers to bring the best games to users on both WeChat and mobile QQ.

WeChat’s social gaming elements will rival similar platforms from Line, KakaoTalk, Apple, GREE, and DeNA. Tencent is already China’s top gaming and internet company, posting company-wide revenues of $7 billion for full-year 2012.

(Source: Techweb – article in Chinese)

After months of testing it out in South Korea and Japan, the messaging app KakaoTalk is today launching its social gaming platform for users in Indonesia and Vietnam. Along with this, a number of third-party game developers have created Indonesian and Vietnamese language versions of their social gaming titles that integrate with KakaoTalk.

Five games are ready today for the messaging app’s users in Indonesia and Vietnam: HotDogStudio’s Everyone’s Game for Kakao, Com2uS’s Tiny Pang for Kakao, LIVEZEN’s Astrowings for Kakao, GameZen’s BirdPang for Kakao, and CraveMob’s Hunter Cat for Kakao (pictured).

KakaoTalk has been pushing hard into both those Southeast Asian markets in the past few months, even spending on a big budget TV ad campaign for Indonesians that fused K-pop with one Indo pop star.

Korea-based KakaoTalk has just over 80 million users, and the startup made $7 million in profit last year, despite being up against web giant rivals like NHN (makers of Line), Tencent (WeChat), and Facebook Messenger.

The KakaoTalk Game Platform launched in its home market last August and soon showed its worth by propelling a number of its supported games to the top of Korea’s gaming charts. It then rolled out in February in Japan (Update: Also in the US since last November).

We know that Mumbai-based game studio Reliance Entertainment Digital makes a lot of titles, but it usually focuses on mobile. That’s why it has only just made its debut on Mac OS X. The game in question is Real Steel HD, based on the robot fighter movie Real Steel that starred Hugh Jackman.

While Jackman is nowhere to be seen in Real Steel HD, the game gives you plenty of choices for a monstrous metallic melée with the option of a tournament or survival mode.

Reliance Games first released Real Steel back in 2011 and has seen millions of downloads across versions for Android and iOS.

As for the studio itself, Reliance Games expanded its operations in Japan and South Korea last month by acquiring Funnel Japan and taking a 51 percent stake in Seoul’s Bluesom. With those scoops, the Indian studio seems set to launch a turn-based card battle game in those East Asian markets to challenge the phenomenally successful Puzzle and Dragons.

Reliance Entertainment Digital subsidiary Zapak Mobile Games recently recorded a whopping 100 million downloads from the Nokia Ovi Store for its very many feature phone titles.

Real Steel HD is priced at US$6.99 in the Mac App Store.

Tuesday marked the beginning of the blockbuster Call of Duty franchise’s first real entry into China: Call of Duty Online. Western publisher Activision has paired with China’s Tencent to launch the game in China, and while not everything is online yet — microtransactions aren’t yet available and it’s called “closed beta” for a reason — we should soon begin to see how China’s gaming marketplace will react to the game.

On the one hand, there’s every reason to expect success. Call of Duty is a popular franchise everywhere — China is not an exception — and having an official version and official (hopefully lag-free) servers on the mainland should help to increase the franchise’s popularity.

Even so, though, I have to wonder if the game is offering enough. While it’s being billed as “a totally new game” on the official site, there isn’t much to it that’s new at all. For example, the “new maps” in the latest alpha build of the game are almost all from previously-released Call of Duty games, including a couple from the original Modern Warfare game that is now more than half a decade old.

And while previous Call of Duty games were never marketed to Chinese players, many Chinese gamers have played them. Indeed, Call of Duty titles are among the most widely pirated in China (if street-side pirated game salesmen are any indication). For many Chinese gamers, these “new maps” are six years old because they played the original Modern Warfare at the same time everyone else did. So what’s new and exciting about Call of Duty Online for them? As far as I can tell: nothing, except for the fact that they now have the opportunity to pay for things in the game. Oh joy.

To be clear, I still expect Call of Duty Online to do well, if for no other reason than that the promise of being able to play lag-free games on Tencent’s servers is going to entice a lot of FPS gamers into trying the game out (again). But I suspect a subset of Chinese gamers will still be a bit miffed about having what is very clearly old content repackaged and shoved in their faces while Activision and Tencent shout about how it’s “all new.” Chinese FPS fans have played Call of Duty games and they are not idiots; the game may be fun but there isn’t much about it that’s actually new.

With that said, we’re still planning to take the new game for a spin and kick the tires a bit once it comes out of closed beta. It will be interesting to see just how deeply Tencent and Activision have embedded microtransactions into this game, and whether they ultimately enhance it or cripple it. My hopes are for the former, but neither Activision nor Tencent have a great record when it comes that sort of thing, so we’ll have to wait and see. In the meantime, though, don’t believe the hype about Call of Duty Online being “all new.” It’s not.

There is no end to the Puzzle and Dragons hype in Japan, it seems.

The country’s top smartphone game now has over 12 million users, is generating a staggering US$62 million to $86 million per month, and has been advertised with a new campaign on national TV since the end of March.

Maker GungHo (3765.OS) has just announced a Nintendo DS version of the RPG/puzzle hybrid game for later this year, in addition to the release of a spin-off dubbed Puzzle and Dragons Challenge for iOS and Android a few days ago. both titles are for Japan only at this point.

And recently, the company rolled out a Puzzle and Dragons English version on Android (here is the iOS version that came out late last year).

GungHo is listed on the Osaka Stock Exchange, and I have pointed out how their market cap has risen over the last few months (driven almost exclusively by Puzzle and Dragons’ growth) quite a few times in the past.

As a reaction to the two Puzzle and Dragons spin-offs and the new English-language Android version of the game, GungHo’s stock price went through the roof.

After adding close to 15 percent in a single day, GungHo’s market cap now stands at a mind-blowing US$9 billion (Editor’s note: It’s $10 billion as of now). In that area, GungHo destroys every mobile game company out there, including:

• DeNA ($4 billion)

• GREE ($2.8 billion)

• Zynga ($2.4 billion)

With over $10 billion, GungHo’s market cap exceeds that of national airline ANA, Daihatsu, Mitsubishi Motors, Sanyo Electric, NEC, or Sharp: that’s what one successful smartphone game – a potential new billion dollar franchise – can trigger on the Japanese market.

India-based mobile gaming developer and publisher Zapak Mobile Games made an announcement a couple of days ago that it has now passed the 100 million user download mark from all of its game titles on the Nokia Store. How many of Zapak’s game titles so far on Nokia? Over 350. The company notes its huge increase from 50,000 download mark passed just 14 months ago.

Currently ranked first on India’s Nokia Store, Zapak discloses that its most popular game is T20 Cricket 2012 with 7.76 million downloads, with Border War Face Off at second place with 5.83 million downloads. Nokia India representative Gerard Wego believes that Indians love games. With over 80 million downloads occurring on the Nokia India Store every month, one of its most popular categories is gaming.

Besides having its games on the Nokia Store, Zapak also showcases its games on its mobile site. A Reliance Entertainment Digital (the parent company of Zapak) representative told us that the mobile site has roughly three million unique visitors every month. The team will focus on creating local content that can be connected with its Indian audiences.

When it comes to mobile games, Reliance Entertainment Digital is eyeing a bigger market than just India. The company has made its presence felt in Canada, the US, as well as Korea and Japan. Its international gaming division Reliance Games – which primarily builds smartphone games – has announced its full acquisition of the mobile gaming division of Funnel Japan and the majority acquisition of Korean gaming studio Bluesom a month ago.

The big picture, the representative said, is to cater to the first generation of mobile device users in India while strengthening the company’s footprints in the international market.

According to Tencent Games, Korean Game publisher Liveplex has inked a deal with Thailand’s SBT to bring its risque MMORPG Queen’s Blade Online to the country for the first time. Queen’s Blade Online, also sometimes called Scarlet Blade, has previously expanded into Japan, Taiwan, and China.

Like most MMORPGs, Queen’s Blade Online is apparently mostly a monster-killing grind, but unlike most MMORPGs its characters are mostly women (and disturbingly, one young girl) wearing some of the skimpiest outfits imaginable (yes, I know a lot of games have women in absurd outfits, but Queen’s Blade takes it to another level). I haven’t actually played it, but based on the videos I have seen, the dev team seems to have spent a lot of time on its, ahem, bouncing physics.

Whether you find this kind of game titillating or creepy, it’s hard to deny that it sells, and very soon, it will likely be selling in Thailand. But I challenge even the most dedicated giant-digital-boobs enthusiast to watch the last minute of this video (NSFW, obviously), which features some of the game’s leading ladies dancing spastically to club music, and not cringe.

(via QQ Games)

Indonesian comedy band Project Pop is quite famous in Indonesia. Since the group’s debut on TVs with its previously named group Project-P in the 1990’s, they have become quite a household name here. Yesterday, the band announced the launch of a game titled Power Pop which features members of the group as characters.

The game itself is built by local developer Own Games. This Power Pop game is built for Nokia Asha Full Touch phones and will cost you IDR 5,000 (US$0.50) for the full version. Power Pop is a 2D side scrolling action game where you are the main character and must fend off invading pirates which are looking to steal the island. Yes, it’s not a typo, the pirates are indeed trying to steal the island. not invade. That’s the kind of wacky premise that suits Project Pop just fine.

Each game character comes with its own special attributes, like Tika Panggabean’s dogs and Yosi’s basketball. One of the trademarks of Own Games’ titles is its mascot, Tako, which shows up in each of its games. This time Tako is a secret playable character after you complete the game. The team insists that for each and every project, Tako must be involved as this is Own Games’ personal touch. This kind of idealism has led to the studio rejecting a few offers to build games for other parties.

Pitching with a tweet

Own Games founder Eldwin Viriya told me that the game was released two weeks ago, and in that short time it has been downloaded over 18,000 times on the Nokia store. He also talked about the story of how his team got this project in the first place: by pitching with a cold tweet.

Eldwin sent a tweet to one of Project Pop’s members, Tika, to ask if she’s interested to build a game together. The following day, the group was meeting Project Pop’s manager. But it took quite some time and persuasion to get Project Pop onboard with the game idea.

Own Games has so far built eight titles, all aimed mostly at Nokia users and/or Nokia’s Symbian OS. The developer won the recent Lumia Apps Olympiad in Indonesia with its Windows Phone game called DragManArds. The startup was also one of the winners at Ancol’s Coding on the Beach competition.

You can give the game a try here. The band also sells some Power Pop merchandise which can be shipped worldwide from here.

When it comes to soccer¹, there’s one brand global video gamers prefer: FIFA. Despite being the product of America’s two-time “Worst Company Ever” winner EA, FIFA is beloved by fans both because it’s fun to play and because it includes tons of licensed teams from all the most popular soccer leagues around the world.

But Konami’s second-place Pro Evolution Soccer (PES, also called Winning Eleven in Japan) may have finally found a gap it can use to challenge FIFA’s dominance, especially in Asia: the Asian leagues. Konami announced on Monday that it has finalized a deal with the Asian Champions’ League that will see Asia’s top club teams coming to the game for the first time ever in PES 2014. And while FIFA does have teams from Korea’s K-League and Australia’s A-League, it doesn’t have any club teams from other Asian countries, so Konami’s game will be the first to offer those teams to players.

Chinese soccer fans, for example, will be able to play as China’s top club teams Guangzhou Hengda, Jiangsu Shuntian, Guizhou Renhe, and Beijing Guoan for the first time ever in a major soccer game. And Konami is reportedly in negotiations to bring the entirety of China’s Super League, Japan’s J League, and Thailand’s Premier League into the game as well.

Although the biggest European clubs have huge followings in Asia, Konami’s inclusion of Asian fans’ hometown clubs could be a way of helping it scoop up some of FIFA’s market share across the region. No team licensing can make up for a bad game, of course, and it remains to be seen whether PES 2014 will be able to compete with FIFA 14 on that front. But if the games are comparable in other ways, the pull of being able to play as the hometown heroes may be enough to bring some Asian fans over to PES.

In China, it already appears some fans are excited about the prospect of playing as Chinese Super League teams. The comments section on this article about the new PES 2014 seems to have descended quickly into banter and cursing, with fans talking about things like whether games played in Beijing Guoan’s home at Worker’s Stadium will feature the sounds of Guoan fans’ legendary foul-mouthed chants. If Konami can capitalize on that interest, it may just have found a way to challenge the dominance of FIFA in the world’s most populous continent.

1. Yes, I called it soccer and not football, because that’s what the game was originally called. Watch this newsreel clip of Liverpool FC from 1935 if you don’t believe me. Football used to refer to any game played on foot, with the most popular games being Association Football (the sport we now know as soccer) and Rugby Football. The name “association football” was later shortened to assoccer and then just soccer in the colloquial language of the time in the UK.

One of Perang Mistis’ cards – Rangda

Today, Indonesian game developer Agate Studio launched its newest game made for feature phone users in Indonesia. Called Perang Mistis (meaning “mystical battle”), the game is released on Agate Studio’s new feature phone gaming platform called Gempon, which was soft launched last week.

As with other feature phone-based games, Perang Mistis offers a simple social gaming experience. In this one you will earn ghost cards and use them to fight the other ghosts in this mystical battle. Early on, you will first get to choose one of three Indonesian ghosts, like tuyul and jelangkung. You can combine your ghost cards and battle with the other online players too.

An Agate Studio representative told us that they created Indonesia’s newest feature phone gaming platform, Gempon, because they want to build a better gaming ecosystem in Indonesia. The platform first went live five months ago, but only last week was it launched to the public with its payment system supported by the country’s biggest telco, Telkomsel.

So far there are over 10,000 members on Gempon. Its monthly active user-base is also around the 10,000 mark, with about 1,000 daily active users. There are 10 games available to be played on Gempon. This includes Agate Studio’s flagship game Football Saga and Agate Jogja’s Mayapadha. Gempon is fully in the Indonesian language.

Foreign players

The Agate Studio representative remarked that there is something ironic about the Indonesian game market so far. Essentially, foreign players are making more money here while local developers are having problems doing so. He added that Gempon will focus on bringing more local developers onboard, as well as helping them monetize their games.

The foreign players the studio rep could be referring to include Singapore-based Kotagames which now has around six million users. Another Singaporean feature phone gaming player looking to make a mark here is FunSpot, which just tied a payment partnership with the same telco that supports all three feature phone players mentioned here – Telkomsel.

The feature phone market in Indonesia is still a big one with space for more to join in the gaming sector. According to Jakarta Founder Institute director Andy Zain, out of 280 million mobile phone connections in Indonesia, 115 million of them are online. But only a mere 30 million of them subscribe to 3G data packages. This means – according to my math – that feature phone gaming platforms like Gempon, Kotagames, and FunSpot have around 85 million 2G users to be shared.

Yodo1 is a game development studio in its own right, and it does a lot more than just peddle others’ games to Chinese smartphone owners. It actually co-produces the China-market versions of its clients games, getting access to the code so as to add graphics, music, and virtual items especially for local gamers.

In today’s announcement – via the team at TechCrunch – Yodo1 CEO Henry Fong says that it has 25 million active Chinese players of its clients’ titles, such as Defiant Development’s Ski Safari, and XMG’s Powder Monkeys. For fun, I made a collage of the Chinese and international versions of Powder Monkeys (pictured below) to compare and contrast the styles.

The funding will be used, Henry says, to “expand Yodo1′s production capacity […] and build the company’s platform and production team.” Referencing telco SingTel and possible future expansion, he added:

Emerging markets such as China and Southeast Asia represent the most exciting prospects for mobile games developers, with close to one billion mobile subscribers migrating from feature phones to smartphone handsets over the next two years. [For that reason,] the SingTel Group is a perfect partner for Yodo1, with over 450 million mobile subscribers across Southeast Asia and other high growth emerging markets, and growing.

China currently has about 160 million active Android users, and 85 million on iOS, representing a massive mobile gaming market that could easily grow to half a billion potential smartphone gamers by next year.

1. DNF (also called Dungeon & Fighter, Dungeon Fighter Online, etc.). A Korean-developed beat-’em-up game that’s pretty old (released back in 2005) but still very popular in China.
2. CrossFire*. China’s version of Counter-Strike (a tactical first-person shooter), another oldie-but-goodie that was actually developed by Korean devs SmileGate and released in 2007.
3. League of Legends. The DOTA-based competitive online game that has been immensely popular worldwide.
4. QQ Speed. A 2008 racer developed and released by — no big surprise here — Tencent Games.
5. QQ X5* (QQ炫舞). A casual dance game also first released by Tencent in 2008.
6. Dream of the Three Kingdoms (梦三国). A fantasy battle game developed by Hangzhou-based Electric Soul and released in 2009.
7. AgainstWar (逆战). A Tencent-developed online first-person shooter first released in 2011.
8. Fantasy Journey to the West. A fantasy RPG developed by Netease and first released all the way back in 2003.
9. Counter-Strike Online. The original tactical first-person shooter, popular around the world and still played in China too. Developed by Valve and Nexon, originally released in 2008.
10. NBA2KOL. As you can probably guess, this is an online basketball game developed by 2K Sports.

If you’re wondering why most of the games on this list seem really old, it’s because most of these games are frequently updated. Many of them now look totally different and have completely different content when compared to their original beta releases, so even if you’ve been playing the same title for years, the content stays fresh enough to keep gamers from getting bored.

(Info about the games comes from their Baidu Baike entries, image via this BusinessWeek article which incidentally happens to quote your humble correspondent.)

*Both of these games had alternate versions that also made the top ten list on QQ Games’s site, but since they’re just two different versions of the same game, I’ve left the alternate versions out of my own list.

That’s a big deal because it makes payment for users super easy, and when payment is easy, users pay more. Given that China Mobile has more than 700 million subscribers, this feature gives developers access to a massive marketplace with huge monetization potential. Moreover, the SDK allows developers to monetize in this way completely on their own, without joining any gaming social network.

The SDK also gives devs access to the AppFlood ad network, which allows devs to buy, sell, or trade ads with other apps, but the big selling point here is definitely the China Mobile billing integration, and for some developers, that’s definitely going to be a game-changer. PapayaMobile says that the new Android version of iBomber, the popular iOS game, will be the first game to launch using the integration from the SDK, so it will be interesting to track that game’s success over the next few months.

This is for work, I swear!

But of course, some Chinese gamers are asking a different question: what games are these public servants playing? The answers, it seems, are pretty similar to what regular Chinese gamers are playing. But if you want to play games like a Chinese government official, here’s what you should be playing:

Casual Games: Fight the Landlord!, Mahjong. No surprises here as these are popular games offline as well (Fight the Landlord is a card game) and they’re very easy to find and play online.

Flash Games: Happy Farm. Needless to say, browser-based flash games are quick popular because they can be exited with one quick click if your boss comes walking around the corner. Chinese public servants are apparently partial to social games like Happy Farm (the Chinese game that Zynga cloned to make Farmville).

PC Games: Demigods and Semi-Devils, Fantasy Journey to the West, Zhuxian, Do Po Cang Qiong. MMORPGs like World of Warcraft don’t see to be as common among Chinese officials as they are among regular Chinese gamers, but clearly public servants have nothing against historical-fantasy-style RPGs.

Multiplayer Competitive Games: DOTA, League of Legends. Yup, even Chinese officials aren’t immune to China’s DOTA craze, apparently. So watch out the next time you fire up a game of League of Legends with strangers; your teammates might just be the people who are supposed to be running your city!

Mobile Games: Fruit Ninja, Fishing Master, Temple Run. Here, Chinese officials are basically just reflecting what the top free game downloads are on Chinese app stores, so these titles shouldn’t come as much of a surprise.

Again, these results come from an investigation with a very small sample size, so take them with a grain of salt. But if other Chinese public servants game like these guys apparently do, then Chinese officials are playing more or less the same games as regular Chinese gamers.

(via QQ Games)

North Korea’s missile belligerence has been the target of an awful lot of humor, but the folks at Taiwan’s Next Media Animation have taken things a step farther and gone interactive with Best Korea Smackdown, a flash game that tasks players with shooting down North Korean nukes as Kim Jong Un attempts to ride them into their targets.

The game is extremely simple, and it’s really more of a gimmick than it is a game. Gameplay involves pointing the mouse at incoming missiles, clicking, and then releasing when your anti-nuke missiles are at maximum power to try and shoot down Kim’s missile nukes. Your anti-nuke missiles seem to feel the effects of gravity very heavily, but you only have to survive for less than a minute, and the first time I played the game, I beat it by accident. It’s the sort of thing that’s good for a laugh, but you’re not likely to play it more than once.

It seems that NMA is taking the game somewhat seriously though, as it’s available in Chinese and Japanese in addition to English. And since it’s built in HTML5, it will even work on mobile devices, so you can shoot down Fatty Kim’s nukes on the go if you really want to.

Puzzle/RPG hybrid Puzzle & Dragons and messenger app Line aren’t the only hypes in Japan’s smartphone world right now.

The third big name that must be mentioned in this context is Nameko Saibai, a series of super-quirky smartphone games that center on cute mushroom characters (nameko is a special mushroom, while saibai means cultivation).

Tokyo-based Beeworks probably didn’t know they were to produce the country’s first really big smartphone game when they launched the first Nameko title, namely Nameko Saibai Kit (English version: “Mushroom Garden” or “Funghi Gardening Kit”) in June 2011 on iOS – eight months before Puzzle & Dragons.

Today, if there is one company that can be labeled as a Japanese counterpart of the makers of Angry Birds, Rovio, it’s Beeworks – albeit on a small scale.

The first game in the franchise

As the title suggests, players need to grow mushrooms on a piece of wood, and wait a while for them to grow before harvesting them by swiping over the screen. There are varieties of Nameko, some of which are harder to get than others. The goal of the game is to “collect them all”. There is basically no real game play, no high-quality graphics or music (quite the contrary), and no social hooks.

Reasons I heard from Japanese players why they like the game so much include “I like the feeling of swiping over the screen to harvest the mushrooms”, “The Namekos are so cute”, and “I love how they say NNFF NNFF when I harvest them”.

This first Nameko game took Japan by storm (without any marketing at the start) and currently boasts 11 million downloads across iOS and Android, putting it in Puzzle & Dragons territory.

Variations on a theme

Much like Rovio with its numerous editions of Angry Birds, Beeworks was very clever in creating variations of essentially the same game and making use of its existing user base for distribution. There are two different versions in addition to the original, namely Nameko Saibai Kit Seasons (users can harvest different mushrooms, depending on the season) and Nameko Saibai Kit Deluxe (which has some improvements, i.e. BGM).

Beeworks has been seeing considerable success with this strategy, in Japan and some Asian countries. The company is offering English versions of Nameko (on iOS and Android), but success outside Asia has been limited so far. As of April 7 this year, all Nameko Saibai Kit games have been downloaded 30,192,789 million times worldwide.

Parallels to Rovio

The Japanese developer can’t think in billions like Rovio does, but the numbers above are pretty impressive, and there are a few parallels between the two companies. For instance, much like Rovio, Beeworks was a small company that was around for a long time but largely unknown before landing its first real big hit (Beeworks was established in 1998, Rovio in 2003).

Both companies rolled out variations of their hits in quick succession and cross-promoted them inside the existing user base: the “Seasons” versions even share the exact same name and idea. Both franchises are specifically made for touch screens, feature “character-focused” design, come with a low learning curve and with extra-cute graphics and sound.

But the biggest parallel can actually be found somewhere else.

Nameko’s popularity in Japan made it possible for Beeworks to build a successful merchandising business around its IP: there are now Nameko-themed toys, phone cases, stationery, key holders, clothes, music CDs (yes, really), candy, coffee mugs, manga, furniture, slippers, etc.

The line-up of official Nameko goods can be found here (the list is not even complete: for example, it doesn’t show there are special Nameko stickers available for Line, too).

What’s interesting (and a big difference to Angry Birds) is that all Nameko games are entirely free: there are no download fees, no premium versions, and no in-app purchases. In addition, Beeworks is relatively easy on the ads, a lot of which are just used to drive traffic from one Nameko game to the other.

The strategy here is to bring the game in front of as many eyeballs as possible and make money (almost) entirely with non-game related products later.

Beeworks isn’t saying how well this is working, but anecdotally speaking, I can see the strategy of building a character goods business on top of a free game series succeeding – at least here in “character-crazy” Japan (the title’s Facebook page offers a lot of hints). I even believe the life cycle of the Nameko merchandising business could be longer than that of the apps, which may be something Rovio is betting on as well with Angry Birds.

But so far, the game itself is still working: social games specialist Chiho Komoriya (who is part of a family of farmers in Akita prefecture) goes so far as to say Nameko’s popularity is responsible for the recent increase in demand for real nameko mushrooms in the country.

I’ve written a lot recently about murders revolving around video games in China (i.e. this, this, this, and this), but the latest gruesome story comes from Taiwan, and it involves gamers being not so much horrifyingly violent as horrifyingly indifferent.

On April 3, an 18-year-old walked into an internet cafe in Kaohsiung, Taiwan, and stabbed a man several years older than him to death with a watermelon knife. The crime was caught on the internet cafe’s surveillance camera, and nearly as concerning as the murder itself is the fact that none of the many bystanders in the internet cafe (you can see some of them in the image above, milling around immediately after the murder had been committed) attempted to stop it from happening. Even more extreme, one female gamer (that’s her in the top right in the image below) ignored the crime completely and continued to play games even through the crime happened so close to her that blood had splattered onto her clothes, according to eyewitnesses.

It’s hard to imagine what game could be so engrossing that you don’t want to quit even when blood is quite literally flying around you, and the Shenzhen Satellite TV station’s news report on the incident doesn’t report that or interview the girl directly.

(Shenzhen Satellite TV)

The hype around Japan’s most popular mobile game Puzzle and Dragons, which is estimated to generate a mind-blowing US$62 to $86 million per month (or more) in sales, continues.

According to maker GungHo, the RPG/puzzle hybrid game now boasts 12 million registered players in Japan (the company doesn’t say how many users the game has abroad).

It took Puzzle and Dragons a total of 15 days to go from eleven to twelve million users. Here’s a chart we made of the game’s growth using data from Japanese news site Social Game Info:

One day after the game hit 11 million users, on March 26, GungHo started a new TV ad campaign.

What’s interesting about Puzzle and Dragons is that this is the tenth time in a row the title attracted one million users in less than three weeks. This development started in October last year, just after the Android version was released and GungHo started advertising the game on TV for the first time.

(UPDATE: Tencent responds by saying: “Tencent is in the process of building a mobile games open platform, which is positioned to increase engagement with mobile Internet users — both wireless QQ and Weixin/WeChat. To facilitate the testing of our new open platform, we are developing some games internally and also sourcing from third-party game developers. We are in the early stage of preparation, and have not released any screenshots or images of these games. As the largest game platform in China, we have deep respect for intellectual property and will work with related parties to enforce intellectual property protection on our game platforms.”).

As with platforms like Apple’s Game Center, or the gaming elements of rival chat apps KakaoTalk and Line, the titles will require gamers to sign in – this time with a WeChat (or a Tencent QQ) username – so that you can challenge buddies within the game. The leaked photos, as seen on iFanr, show three similarly named casual games. They’re called WePang (seems like a bit of a rip-off of Anipang, which in turn is basically just Popcap’s Bejeweled), WeLink, and a parkour game called WeRunner:

Tencent is already China’s top gaming company by revenue, with a range of both casual and hardcore games across numerous platforms. But its QQ-based social gaming, which is hugely important to the company’s revenue, is reliant on desktop gaming and its old-style QQ IM service, so Tencent needs to brings its game face to mobile with its popular WeChat app.

WeChat has over 300 million users in total, of which about 40 million are outside of China.

(Source: iFanr – article in Chinese)

California-based game studio Kabam has set up a $50 million fund aimed at getting Japanese games into the Western markets of Europe and the US. Kabam’s fund will also involve assistance in localizing and translating games for export, marketing the titles, and helping developers with analytics on their game’s performance.

As noted by the WSJ, the new Kabam fund and platform puts the studio into competition with Japanese social gaming giants GREE and DeNA for the affection and allegiance of Japanese developers.

Since Kabam pitches itself as a maker of social games for hardcore gamers – not for bizarre and fairly simple games like Battle Cats – it’ll likely be more interested in promoting titles like its popular and free-to-play Kingdoms of Camelot. So this news might be positive for Japanese developers who make more complex titles like the card battle game Rage of Bahamut.

“We’re putting our money where our mouth is,” said Kabam CEO Kevin Chou, who added that a Japanese game developer can double revenue by achieving success in western markets. Although Japanese smartphone owners are great for paying up for games, the prospect of doubling the money will appeal to a lot of startup studios in Japan.

Kabam also has a Beijing studio, where it now employs nearly a hundred people after boosting numbers in December with the acquisition of Balanced Worlds. Kabam acquired two other properties last year after a $85 million series D funding round helped fuel aggressive expansion.

Kabam made more than $180 million in revenue in 2012 and now has 600 employees across the US and China.

(Source: WSJ Japan Realtime blog)

According to data released by Tokyo-based game magazine publisher Enterbrain (published in The Nikkei over the weekend), the Japanese market for video games grew 1.2 percent to US$4.6 billion in fiscal year 2012 (which ended on March 31, 2013).

Software sales for gaming consoles and handhelds contracted 1.2 percent to $2.8 billion in that time frame.

But hardware sales increased five percent to about $1.8 billion in Japan, thanks to the introduction of the Wii U (well, OK, if the report says so), a new 3DS, and Sony’s recent price cuts for their consoles.

What’s interesting is that while a 1.2 percent plus sounds pretty modest, the overall market for video games in Japan grew for the first time in five years. Enterbrain’s numbers for the first half of fiscal 2012 were already indicating such a trend.

And what’s even more interesting is that even though different data providers use different methods, it looks like the sizes of the video and social gaming markets in Japan are now very similar.

The latest report of note came from Yano Research in January, estimating the social gaming market in Japan was worth $4.3 billion in 2012. Even though that number is closer to $4 billion using today’s exchange rate, that market grew faster between 2011 and 2012 than the one for video games, making the difference not that big anymore.

While Android is on the rise in Southeast Asia, it’s still a very fragmented market. There are lots of feature phone users and browser-based games as well. To discuss this, we have onstage (pictured left to right):

• Tetsuya Mori, managing director at DeNA Asia
• Evan Spytma, regional director at Popcap Games
• Alvin Yap, founder at TMG

All three are good friends of the blog – and important figures in this very mixed mobile gaming landscape. Our guest moderator is Anton Soeharyo, founder at gaming studio Touchten. Here’s the Startup Asia live blog:

#12:17: Mori-san says that, in Southeast Asia, Singapore is “very important and unique” and it’s the hub for the region. A good play for the affection of the local audience! Meanwhile, DeNA (TYO:2432) has been active and acquiring in Vietnam.

#12:19: Evan says that it’s focusing on Indonesia where it’s expanding a lot, and also in the Philippines where he’ll be relocating too. China is a big area for PopCap too.

#12:20: Alvin: Indonesia is number one priority for TMG, and then Thailand, the Philippines, and also India – all major places for finding feature phone users.

#12:21: Alvin: For localization, SEA is a challenge. For example: the Philippines is more like a western market in terms of gamers’ likes and dislikes. For his startup, language versions, especially, Thai, is a difficult aspect to adapt.

#12:23: Evan: For China, they opt to break down the games into in-app sections for easier monetization. Chinese consumers like in-app purchasing so that a game can be free/low cost.

#12:24: In contrast, for Japan, Evan says that PopCap had to focus on characterization in the games – such as the way it put characters into Bejeweled, which included “attractive women – which is needed in a game in Japan”.

#12:25: Mori-san explains that DeNA continuously develops, tweaks, and localizes almost weekly. And, yes, the games do need sexy girls in them.

#12:27: Anton concurs with Evan that cultural adaptation is important, and he targets that aspect at TouchTen as well.

#12:28: As for handsets, DeNA focuses on iOS and Android. Evan says that feature phones are still present, but not in major markets like China. As Evan read here on Techinasia, Android makes up about 86 percent of smartphone sales in China.

#12:30: Alvin says that in his markets, even Android users are on very basic, low-budget phones.

#12:30: So, when to abandon Flash games and not-so-smart-phones, asks Anton. Alvin says there are still users for them to find, and money to make, on feature phones. But he’s still keen to “find his feet” in the regional smartphone sector.

#12:32: Evan: Yes, feature phones are still 60 percent of the market across the whole region, because there’s still a $100 price difference between basic phones and even cheap Android devices.

#12:35: Mori: DeNA has pretty much abandoned feature phones. No ROI in it. He says the tipping point to smartphone domination will happen everywhere eventually. Even India might seem to have low smartphone penetration, but he reckons it’ll happen soon enough. Varies by each country.

#12:36: Evan: We need to think to the next step beyond smartphones – to multi-screens or whatever’s next. Smartphones are a no-brainer. His personal view: more about looking at games that can be used across all platform. That will create new business models, and those can be leveraged in SEA.

#12:38: Alvin: TMG has 2.6 or 2.7 million users, and now boosted by

12►

#12:41: Alvin is now talking about Thailand where’s there’s a high ARPU. It’s the highest ARPU for TMG. India and Indonesia less so.

#12:42: Mori: DeNA is looking at Vietnam more for its team and developers, making games for the Japanese market. The returns could be huge if a game really takes off in Japan. DeNA works with VNG, and VNG even does the Japanese language aspects, so it’s all made with its local partner. He says the results are “impressive”. So “95 percent of the code is done by Vietnamese guys” – but the games are not really made for Vietnamese gamers.

#12:44: Anton asks if the three panelists have any SEA horror stories in terms of developers and biz dev hassles? Alvin says it’s hardest to explain to outsiders how the market works and how he can monetize. Mori-san tells of one Indian game developer who didn’t want to meet in India as he was wanted by Indian police. As for Evan, he finds that being blatantly ripped off in China is a big pain. E.g.: One rip-off company using PopCap artwork explained that if they shut down because of PopCap’s cease-and-desist letter, they’ll get on a bus and drive to PopCap to destroy the company in the same way that the legal threat would ruin the pirate’s company. Stay classy, China.

#12:49: And on that bombshell, that’s the end of the live blog.

This is a part of our coverage of Startup Asia Singapore 2013, our event running on April 4 and 5. For all our newest Startup Arena pitches, see here. You can follow along on Twitter at @techinasia, and on our Facebook page.

Signs announcing the shift to mobile gaming in the Linekong offices.

Earlier this week, Linekong Online was one of China’s best known and biggest developers of web games. But today, the company is no longer a web game developer at all. On Tuesday afternoon, the company unveiled a new strategic focus that will see Linekong shifting completely into mobile games. “Please call us a mobile games company!” blares a banner that was hung in the Linekong offices Tuesday afternoon as the company celebrated the shift.

CEO Wang Feng sees it as a daring, risky move. “This is the most bold and crazy risk our company has taken in our six years in business,” he wrote on his weibo account. The company is not entirely abandoning its old model — it will continue to operate and update already-released games like Warrior King and Journey to the West Online. But all new titles will be mobile games. Wang says the company aims to release six new games in 2013.

Personally I’m not sure the move is as bold and crazy as Wang’s suggesting; China’s mobile game market is big (though not as big as you might think) and growing, so any serious game developer should be looking at it carefully. Moreover, Linekong has released mobile games before, so it won’t exactly be starting from square one in the mobile arena. Still, a wholesale switch this abrupt is pretty rare, and it will be interesting to see whether Linekong can bring its PC gamers over to the mobile platform or whether it will have to attract a whole new audience for its mobile games.

(via TechWeb)

Japanese game developer and publisher Nijibox announced on Monday that there are a few personnel changes for the company’s key positions. During this opportunity the company also told us about its latest development: it’s got five million users.

Since Nijibox’s inception in November 2011, the company has gathered an average of 400,000 active users every month across its 46 game titles. 18 percent of users downloaded the game directly onto feature phones, 42 percent from smartphone downloads, and the rest comes from Nijibox’s partnership with gaming platforms worldwide.

Nijibox has achieved quite a feat in Indonesia too, reaching 1.5 million users in December, only five months since the company launched two game titles, Monster Fantasia and Costume Fantasia, last year. Both are card battle games, Monster Fantasia lets you play as a monster tamer and save the world while in Costume Fantasia, you get to save the world by rescuing beautiful ladies first. The company’s monthly revenue in Indonesia also increased 620 percent in that five month period.

Nijibox recently launched its third Fantasia card battle game title in Indonesia called Legend of Fantasia. Set in the future, you get to save the world by fighting off alien invaders.

Founder and CEO Yoichi Aso now holds two more strategic positions as president and representative director. As TMG founder Alvin Yap puts it to fellow entrepreneurs, we hope Yoichi can still get enough sleep.

China’s casual and social gamers are growing by the day, especially on mobile platforms. But what about the country’s more hardcore gaming contingent? These days, an awful lot of them are playing Defense of the Ancients-style games. Defense of the Ancients (now often called DOTA) began as a mod for the real-time strategy game Warcraft 3 (which was hugely popular in China) and eventually became so popular that it spawned a whole host of similar games and, some would argue, essentially created a new genre of game in the process.

DOTA, its sequel, and League of Legends are currently among the most popular games both in China and internationally, but Chinese game operator Tiaoyue is hoping that its new game 300 Heroes can pull Chinese players away from League of Legends. The game is nearly completed, with features already locked, and it enters the final round of internal testing this week. A playable beta is also available on the game’s official site.

Visually and in terms of gameplay, 300 Heroes bears a striking resemblance to League of Legends, something that China’s gaming press has not shied away from pointing out. But the the game does offer one thing League of Legends and other DOTA games definitely don’t: Chinese heroes. In addition to a plethora of wholly fictional characters, 300 Heroes players will be able to select famous historical characters like Zhuge Liang (a famous military strategist from the Three Kingdoms period) and Xuanzang (a famous monk and traveler from the Tang dynasty) as well as famous characters from Chinese fiction like the beauty Diaochan and “Pigsy” from Journey to the West.

Although despite the title it seems the game will only offer 37 heroes at launch, don’t count 300 Heroes out if its gameplay is polished enough to be comparable to League of Legends. Many of its characters are extremely popular in China and could genuinely pull some players away from Western-developed DOTA games if the gameplay is otherwise comparable.

In that way, 300 Heroes offers an important lesson to anyone planning to launch or localize a game for China: localization isn’t just about the language. There is a reason, after all, that so many Chinese RPGs are based on famous Chinese historical periods or popular novels like Journey to the West: Chinese gamers love that stuff. This is not to say that they don’t also like new things, of course, but the call of the familiar can be powerful. Doing something like adding characters Chinese players are familiar with to a game can really make the game more appealing and less intimidating to new players, especially in DOTA-style games where there are generally dozens of characters to choose from.

Anyway, we’ll be keeping an eye on 300 Heroes to see if it can capture the hearts and minds of China’s DOTA-loving online gaming crowd, or whether even the tactical brilliance of Zhuge Liang can’t save it from being “just another DOTA clone.”

Ah Mao (not his real name) has a problem with online games: he can’t stop playing them. But luckily for him and his family and friends, his solution — unlike some other people — was not to murder anyone but rather to try to have himself arrested. His crime? Playing too many video games.

22-year-old Ah Mao says his problem started back in May of 2009, when he discovered Hot-Blooded Fantasy, an RPG game from Shanda that was popular on unofficial private servers. To say that Ah Mao liked the game would be an understatement; he stayed in the internet cafe for a full eight days and nights playing it. He later moved on to other games like Tencent’s QQ Racing and Netease’s Fantasy Journey to the West. As time went on, he got into games on YY and things got worse. Virtually every dollar he earned was going to games.

To his credit, though, Ah Mao has been aware for some time that he had a problem. When his laptop was stolen, he didn’t buy a new one for fear it would only facilitate his gaming habits. He sold his smartphone and replaced it with an old-school Nokia that can barely run Snake. He found a job that required long hours daily in the hopes that it would keep him from gaming too much. But unfortunately, it seemed like every time he got paid, he went on a bender.

His latest was in late March. Starting on the 26th, he spent several days in an internet cafe playing games, and when he emerged on the 29 he decided since it was clear he had no self-control, it was time for the police to get involved. He called 110 — China’s emergency number for crimes — and said, “Come arrest me and lock me up for a few months, I cannot keep myself off of the internet.”

The operator suggested he go to a local police substation, where he met with officers and a counselor. Needless to say, they refused to actually throw him in prison, but the counselor did recommend a three-step approach to recovery based on creating distance, self-control, and supervision. Ah Mao has already tried the first two, of course, but he has lacked external supervision. With the help of family and friends, he may finally be able to kick the habit.

I’ve written a number of stories about game addiction over the past month, and I want to clarify that I’m not suggesting games themselves are the problem. I’m a gamer myself (most recently I have been playing Bioshock Infinite) and I have nothing against games. What I’m trying to drive home with this article and others like it is that gaming addiction is a real problem, and it’s something that Chinese society takes pretty seriously but hasn’t really figured out how to handle yet. You may recall the horror stories from several years ago about China’s game addict boot camps, or that China is currently working on its own conditions for diagnosing game addiction, but it’s clear that some people out there need more than what’s currently available.

(Jiangsu Online via QQ Games)

The company did have some success in mobile gaming in 2012, but its users came primarily via the iOS platform, and since China has way more Android users than iOS users, a harder push into the Android gaming market could yield bigger rewards, although it is also a more crowded and disjointed market. Renren CEO Chen Yizhou said that Renren will be pushing to create a “powerful product line” in Android games.

The move comes at a time when Renren is finding its web-based social network increasingly edged out of users’ online habits by newer and more mobile social products like Sina Weibo and Tencent’s WeChat. The company’s stock has not performed particularly well, and there were even rumors of layoffs at the company late last year. But the company reportedly still has around 700 people in its games department spread out through several offices around the globe, so it should be in a good position to produce and distribute Android games.

Whether or not users will flock to those games is another question entirely, though. China’s Android market is fragmented across dozens of app stores, and competition for users and revenue in the gaming sector is fierce. Plus, as we saw yesterday, China’s young gamers aren’t quite as into mobile gaming as some might expect.

(via Sina Tech)

If you had any doubts about how serious gaming addiction can be — and you shouldn’t, given the number of game-related murders we’ve written about recently — here’s a terrifying story that will set you straight.

24-year-old Guangdong resident Xie Huachang met his girlfriend “Xiao Hui” (not her real name) in March of 2011 while playing games online. The two hit it off, and by year’s end they were living together. But Xie was not just a gaming enthusiast, he was a fanatic, and his devotion to games started causing friction. By March of 2012, Xiao Hui had given up on the relationship and met a new boyfriend online, and in May, she decided to move to Shenzhen to be with him.

Unfortunately, she was still living with Xie, who wasn’t happy about the breakup or her impending departure. One morning in June, as she packed her things to leave for good, he stood in the doorway tearfully begging her not to go. When she refused, his sadness turned to anger. Xie grabbed her by the throat and threw her onto the bed, continuing to strangle her until she had stopped moving and her face had turned purple. She was dead.

Rather than turning himself in or fleeing, Xie then stole Xiao Hui’s bank card and hid her corpse under the bed. He took 300 RMB ($47) out of her account from a nearby ATM, and went to an internet cafe to play video games. He spent the night there, but at around seven the next morning he returned to the room and slipped Xiao Hui’s card back into her wallet. Then he went back to the internet cafe to play more games.

Around noon, he suddenly felt like committing suicide, and went to jump off the roof of a relative’s building before thinking better of it. He sent two text messages, one confessing to the police, and the other to Xiao Hui’s new boyfriend, informing him that she was dead. Two hours later, he was in police custody.

Xie’s case finally came to a close in court this month, and he was sentenced to life in prison. He was also ordered to pay a sum of restitution to Xiao Hui’s family. His regretful attitude about his crime is apparently responsible for his rather lenient (by Chinese standards) sentence, but his case is yet another indicator of the extreme lengths addicts will sometimes go to get a fix. Xie’s gaming addiction sabotaged his relationship with Xiao Hui, and the pull of games was apparently so strong Xie’s response to having committed murder was to steal his dead girlfriend’s money so he could play games for a full 24 hours before much else even occurred to him.

(Guangzhou Daily via QQ Games, image from the film Bangkok Haunted 2: The Unborn)

Dr. Serkan Toto is a gaming expert and independent consultant based in Tokyo. You can follow him on Twitter and his blog. This article is republished with his permission.

The crazy Puzzle and Dragons boom in Japan continues – and it gets even crazier.

Maker GungHo (3765.OS) posted a new financial document according to which sales in February for the company reached an almost unbelievable 10 billion yen in February – up 1,280 percent year-on-year. That is US$106 million. In a month with 28 days.

In January (31 days), GungHo, which is soon to be turned into a subsidiary of carrier SoftBank, reported sales of just US$92 million.

Before you say this is impossible, remember the company isn’t private. It’s listed on the Osaka Stock Exchange – in other words, GungHo cannot make financials up.

As last month, there is no discussion in Japan’s gaming industry that Puzzle and Dragons is the main driver behind this growth. Back then I summarized a few reports in gaming media over here, estimating that the puzzle/RPG hybrid alone racked up between $54 million to $75 million in January – or between 59 percent and 81 percent of GungHo’s sales in that month. (As a side note, that would roughly be my estimated range as well).

Applying this to the $106 million the company made last month, this would mean that Puzzle and Dragons alone generated $62 million to $86 million.

As I mentioned earlier, I have seen many hard-to-believe numbers in Japan’s mobile gaming industry, but this game tops everything. That revenue is generated by nine to ten million registered users the title had in February on both iOS and Android.

Seeing that Puzzle and Dragons is still growing steadily, revenue will probably be higher in March , which has three more money-making days than February.

We’re always keeping our eyes out for interesting and surprising data about China’s games industry, and yesterday, we found a gold mine. A new report focused on China’s teen and twenty-something online gamers from iResearch and QQ Games has surveyed more than 5,000 gamers and done in-depth research on dozens more to present the most in-depth picture we’ve yet seen of young Chinese gamers’ demographics, habits, and desires.

It’s not all exactly what you’d expect, either. Mobile gaming is less popular with the youngsters than you might expect. Teen gamers spend more on up front fees and way less on in-game items than you’d think when listening to industry bigwigs blathering about “freemium” and the demise of the traditional pay-for-it-up-front game. Whether you’re a game developer or someone looking to market to Chinese gamers, there is real insight in this report. Unfortunately, it’s only available in Chinese, but there’s so much of value in there that I spent a whole day picking the report apart and creating the massive infographic you see below with some of the most interesting, useful, and surprising charts and statistics.

If you read Chinese, the full report is absolutely worth checking out, although be warned: it is long.

(Full Report Available Here, Chinese only)

This is big: Japanese telecommunications giant SoftBank (TYO:9984) (the one that acquired Sprint in the US) will launch a tender offer to increase its stake in game studio GungHo Online Entertainment (3765.OS) between April 1 and 26 this year. the deal will be worth over a quarter of a billion dollars. It’s timed to coincide with GungHo conducting a 10-for-1 share split on April 1.

GungHo has produced Puzzle and Dragons, Japan’s most popular smartphone game with over 10 million users. It’s perhaps the most profitable mobile game worldwide, estimated to rack up well over US$50 million per month currently.

A few days ago, GungHo’s market cap reached a mind-blowing $5 billion – more than that of GREE or Mobage operator DeNA.

SoftBank (or SoftBank Mobile, to be more specific) will acquire 6.4 percent of GungHo’s total shares for 25 billion yen ($264 million). With that investment, the telco’s stake in the Puzzle and Dragons maker increases from 33.6 to 58.5 percent.

SoftBank explains:

With this understanding, the company recognized the importance of enhancing mobile content by combining smartphone-focused development capability and infrastructure held by the SoftBank Mobile Group and planning and creating capability in the smartphone game industry held by the target company group to further improve the efficiency in operation of the mobile communications business, profitability and competitiveness.

After the execution of the deal, GungHo will become a SoftBank subsidiary.

SoftBank acquires the shares from a company called Asian Grooves, which is owned by Taizo Son – who is the brother of SoftBank CEO and founder Masayoshi Son (Taizo Son is also chairman at GungHo).

Japan’s NTT Docomo (NYSE:DCM) is buddying up with another giant telco, China Mobile (NYSE:CHL; HKG:0941), to bring its mobile gaming portal to an overseas market for the first time ever. Starting from tomorrow, Docomo’s ‘D Game’ portal, which launched in Tokyo last fall, will launch within China Mobile’s own app store.

Dubbed the China Mobile Market, it’s one of China’s largest third-party app stores (see it here), focusing on Android and feature phone apps and games. The arrival of the D Game portal for China Mobile’s 700 million subscribers will be good news for Japanese developers who publish via Docomo’s platform. An initial 20 titles will launch tomorrow on D Game China [1], from studios like Capcom, Konami, and Square Enix. Its catalog will expand over time.

China Mobile’s app store does support paid apps – via carrier billing, of course – but it’s not clear if the D Game titles will be paid ones. Docomo’s announcement today points out its involvement with Dentsu and NTT Advertising in a Chinese joint-venture called D2C, so it’s likely that the games will monetize via in-game ads.

D Game is part of Docomo’s recent push into content and mobile commerce, along with companion services dubbed dmenu and dmarket [2]. The latter one got a big boost recently with Docomo’s acquisition of a women’s fashion e-commerce site.

China Mobile has just [over 100 million 3G subscribers](Dentsu and NTT Advertising in Japan. Dis), so it has a fairly large smartphone user-base, who are the ones most likely to be keen to snap up Android games.

Recently, the China Internet Network Information Center (CNNIC) released a lengthy and very detailed report on the world of Chinese mobile games. We hope to dig more into the report for future goodies, but the first thing we wanted to share with all you aspiring China game developers out there was a breakdown of exactly who is playing what, by age, by education level, and by location. In its data, CNNIC also helpfully separated the players of online mobile games (i.e. web and HTML5 games that can be played in a browser or that require an internet connection for game functions) from players of regular mobile games (i.e., apps that you download and that run entirely on your phone without needing an internet connection).

Let’s take a look first at the breakdown by age. Note that the percentages here refer to the percent of the total number of gamers who play that kind of game. So, for example, the first column in the graph below tells you that of all the gamers who play regular mobile games, 20.6 percent are under 20 years old.

Now, let’s take a look at the breakdown by education level. It’s interesting to note that apparently the more educated someone is, the more they seem to prefer regular mobile games over online mobile games.

And finally, let’s take a look at what people are playing in the cities versus in the countryside. There shouldn’t be much surprise here; lots more urban people are playing games, and there’s not a big split between online and offline games here.

(Chinese Mobile Gaming User Investigation Report [Chinese only], 2012 CNNIC)

China’s games industry is massive, but along with the massive industry have come massive problems. Chief among those problems is the effect games are having on children. Just within the past few months we’ve seen a debate about whether Chinese net cafes should be age-restricted, read reports suggesting China doesn’t have enough games suitable for children, wondered about the Chinese gaming industry’s overuse of sex, and learned that gaming addiction is a serious enough problem that China will develop its own diagnostic criteria for it. Not to mention the teens we’ve seen attempt to murder and actually murder their parents over internet game-related disputes.

But increasingly, some in the Chinese games industry have been wondering if children well served by a ratings system not unlike the ESRB in the USA, which rates games as “Early Childhood”, “Everyone”, “Everyone 10+”, “Teen”, “Mature 17+”, and “Adults Only” according to their content and how appropriate it is for children.

China does have the “Green Game” system — which is based in both name and concept on the Green Dam censorship software — but there is no specialized organization officially dedicated to rating games, and the result is that even with the Green Game system it’s often unclear to parents whether games are appropriate for their kids. As some gamers pointed out at a meeting with government and industry reps during this year’s Two Meetings, many games have cartoony graphics that look very kid friendly but still contain adult elements like gambling, confusing fees, bawdy jokes, etc.

So does China need something more? Many gamers think so. In a web survey conducted by QQ Games that has drawn over 4,000 respondents (as of this writing), nearly 95 percent said they would support a game ratings system for China. Barely 3 percent oppose the idea.

Unfortunately, creating an effective ratings board wouldn’t that simple a task. In the West, ratings systems are helped by the fact that console gaming is very popular and the games that work on consoles can be relatively easily regulated. But online games, which are hugely popular in China, are more difficult to regulate because anyone with a little coding knowledge can build one and upload it to the web without getting it certified or inspected by anyone. Even if a Chinese ratings board was able to effectively police China’s biggest web game platforms — and that alone would require a huge amount of manpower — it would still have no way to account for games hosted on fringe platforms or just posted to their own websites.

On the other hand, even if a ratings board isn’t a perfect solution, it’s hard to imagine how the creation of one could hurt if it empowers parents to identify at least some of the games that may not be safe for their kids to play. With that said, though, parents should also probably be making an effort to try out some of these games for themselves. Ultimately, that’s the only way you can really be sure if any given game is right for your child.

In 2008, Li noticed a bottle of fast-acting poison in the family’s home. It was pesticide, of course, but Li reasoned that it was likely to make his parents sick enough to go to the hospital, and if his parents were in the hospital, he could play games for as long as he wanted without anyone to stop him. So he slipped the poison into their food one day and then slipped out to play games. By the time he returned home, he had gotten his wish: his parents were in the hospital. But unfortunately for Li, the poison was quite strong, and both his father and mother died.

Li was ultimately caught, tried, convicted, and sentenced to 15 years in prison, and although his crime was originally committed almost five years ago, his story made the rounds yesterday in the Chinese media and was even printed in the official People’s Daily. The tone of the story, which was originally published in Henan Fazhi Bao, makes it clear that this is meant to be a cautionary tale. The final line reads: “What awaits Li Tao is not just his legal punishment, but a lifetime of suffering with guilt and pain.”

And while it might seem like a fluke, frequent readers of this site will know better. So far this year we have already seen another Chinese teen who tried to poison his family over not getting enough internet time (he was luckier than Li Tao; none of them died) and a gamer who murdered two people and burned an internet cafe to the ground when the internet cut out during his favorite web game.

So the moral of the story, we guess, is stay the hell away from addicted Chinese gamers, because they will literally kill you.

(Henan Fazhi Bao via QQ Games)

Tencent’s (HKG:0700) full-year 2012 financials came out this evening, showing that the web giant’s mobile services grew a mere 14 percent in terms of revenue in the past year. But that might change in 2013. In the post-earnings conference call that’s still ongoing, Tencent executives confirmed that WeChat, which now has over 300 million users, will get a game platform soon. The official word is:

We are in the process of designing a game platform for WeChat – it’ll be in testing mode in the next few months.

There’s no date set for the launch of WeChat’s gaming platform – which will compete directly with similar platforms on KakaoTalk and Line, both for users and for the affection of game developers – because, a Tencent executive added, “It takes time to get it right for users. (…) We still view user experience as the number one priority (for WeChat).”

Social gaming has been a boon for both KakaoTalk and Line apps since it became incorporated in the popular messaging apps last summer. As seen with hit games like Anipang, the hook-up with the messaging app can bring in millions of users, creating a revenue-share win-win for the game studio and the social app company. That’s likely the area that WeChat will go in.

Tencent is also China’s biggest gaming company in terms of revenue – and, as was just pointed out during the conference call – “China’s biggest mobile publisher by revenue”. So it has nearly a decade of experience in this area.

In terms of Tencent’s general lackluster monetization of mobile, an executive admitted that there are “hurdles in terms of games, platforms” and maybe “a lack of blockbusters” for users to play, but the conference call crew – including chairman and CEO Ma Huateng, and president Martin Lau – pointed out that things can turn around quickly, and “mobile has the lowest cost per unit time, so we look at it as positive.”

For WeChat users, it seems that Tencent is in no rush to monetize, so there won’t be any money-grabbing features appearing in the app. Another possible channel for WeChat is online-to-offline and local services – something long rumored to take the form of mobile payments and perhaps a mobile wallet. On that area of expansion, Martin Lau admitted that very limited testing has taken place for mobile payments with retailers and merchants, but added:

We take a long-term view – there are so many hurdles and a lack of standardization (for payments). So it’s an experiment that we take a lot of interest in, but it takes a long time to see what needs to be done to build a business model on it.

Let us know in the comments if you’re keen to try out WeChat’s gaming platform and any other potential features.

Tencent’s iconic penguin gets to grips with the company’s latest full-year financials.

Hong Kong markets have just closed, and Tencent (HKG:0700), China’s biggest web company, has released its 2012 full-year and Q4 financials. With Tencent hoping to have a global success story with its WeChat messaging app, more eyes than ever are on Tencent. The headline figure from today’s financial report is that full-year revenues were up 54 percent in 2012 to hit US$6.994 billion. Let’s just say $7 billion.

Most of Tencent’s growing revenue ($5.09 billion) was from “internet value-added services”, including things like gaming and virtual products. After all, it’s China’s biggest gaming company as well.

With a growing push into e-commerce, $704.4 million of all that revenue came from its online stores, such as Paipai and its open platform QQ Buy.

Tencent’s operating profits for 2012 stand at $2.46 billion, up 26.3 percent on the 2011 figure.

WeChat and Social

The latest version of the WeChat app

Disappointingly, Tencent made only two bland references to WeChat’s overall progress, mentioning “substantial growth” in 2012 and an emphasis on “marketing investment to acquire users for WeChat” – both of which were obvious already. The financials also said that WeChat Moments – the Path-like social network inside the messaging app – has “enjoyed rapid user adoption.”

On its other social platforms, Tencent reported monthly active users on its Qzone web profiles (sort of a mix of MSN and Facebook) “increased by nine percent year-on-year to 603 million at the end of 2012.” As for its Facebook clone Pengyou site, it saw a 22 percent boost in monthly users to reach 247 million. The ubiquitous QQ instant messenger hit 798 million monthly active users.

In addition, its Twitter-esque Tencent Weibo hit 87 million daily active users by the end of the year. That’s out of its 540 million registered users. But the microblog remains out-hyped by the identically-named Sina Weibo.

Getting back onto the subject of gaming, Tencent’s QQ Game Platform saw peak concurrent users reach 8.8 million in the fourth quarter of 2012. That’s the casual, social gaming side of its many online title offerings.

2013 targets

Looking to the year ahead, Tencent teased possible “applications, games, and location-based activities” arriving in WeChat and its mobile QQ IM apps.

While Tencent might be worried in private that its big earners – stuff like games and advertising – are reliant on desktop and not well adapted to mobile, founder and CEO concludes that he’s pleased with the Shenzhen company’s push onto mobile screens:

During 2012, widespread smartphone adoption brought both disruption and opportunities to the China internet industry. At Tencent, we began to see early results from substantial investments we have made, and continue to make, in mobile internet products. Tencent now provides many of China’s most popular smartphone apps for activities such as communications, social networking, web browsing, games, news, and music, among others. These apps enable us to reach users who are increasingly spending time on smartphones, extend our ecosystem from PCs to mobile, and provide new mobile-specific features unavailable on PCs. During the year, we also introduced a powerful targeted advertising system leveraging our social networks, built the market-leading open platform in partnership with third party developers, diversified our game revenue internationally, and ramped up a sizeable e-commerce business. As a result, we achieved healthy increases in revenue and earnings in 2012, while continuing to invest aggressively in platforms, innovation and technology in order to enhance value to our users and drive long-term growth for our company.

We’ll drop in on Tencent’s post-earnings conference call later and post any juicy details that might emerge.

Find the full report on Tencent’s investor relations page.

We tested out a couple of the games and the results are, inevitably, quite basic. The idea is mainly being held back by the built-in WeChat web browser, which is more of an after-thought than a modern and fully-fledged browser. It prevents the games going full-screen, and some of the games will only work if you proceed to open them up in another browser like Safari or Chrome. But then none of this is being supported officially by Tencent, makers of the 300-million-user-strong app. Here’s how it works:

First I added DuoPao on WeChat, and then they gave me a list of games to play. I replied with the name of a game…

…Then the game starts inside WeChat’s rather basic web browser. No chance of going full-screen. Er… That’s it.

According to a post on Zhihu – a sort of Chinese Quora – by one of the DuoPao team, the studio so far has “received more than 5,000 users at zero cost” via this WeChat channel. About 1,500 are daily active users inside WeChat. Not bad for a free sideline to their usual distribution methods.

Despite all the issues with games in that basic browser, the startup team will persist with this – and with HTML5 games in general. As with many other shifts towards modern browser-based games – as we saw last year with GREE – a big part of the attraction is avoiding the revenue sharing program with Apple, Google, and Amazon in their app stores.

Social gaming has been huge for rival chat apps Line and KakaoTalk – though in native apps, not in a web browser. We’ll have to wait a while to see how Tencent, which is already China’s top grossing gaming company, can reshape its gaming expertise to fit into WeChat.

Vietnam’s VNG just reported that it hit a whopping VND 2 trillion ($90 million) in revenue for 2012. Yeah, that’s a lot. The company, which has its hands in everything online – social media, messaging apps, games, content distribution, mobile browsers – has long been Vietnam’s biggest startup success story.

The sales record is a 12 percent jump from last year and is certainly a symptom of their shotgun strategy coupled with a focus on entering international markets like Japan and China. It did not reveal how much of that revenue is profit.

With VNG’s new-found focus on mobile, the company is looking to keep up with the shifting tide in Vietnam as smartphones slowly takeover.

(Also read: Le Hong Minh and his VNG Story)

Arguably, today VNG is facing off on multiple fronts. In gaming, which is VNG’s core strength, smaller gaming studios are entering the space, especially for mobile games. This is a threat to VNG’s 60 percent market share of the Vietnamese gaming market. In social media, VNG’s social media baby, Zing, has seen a full frontal assault from Facebook, which has doubled its Vietnamese numbers in a year. In terms of legal issues, VNG’s struggled with Coca-Cola and Samsung pulling their advertising dollars and a newspaper content debacle. And the latest mobile messaging project, Zalo, is in a duel with a handful of foreign competitors such as Line and Whatsapp.

Despite all of this, the revenue numbers indicate that VNG is still on a growth path, which should give them the necessary dough to keep on fighting.

(Source: Pandora.vn)

As I’ve said before, being a gamer in China isn’t always fun. Chinese publishers’ censorship of popular foreign games like World of Warcraft is bad enough, but a new column on Tencent’s QQ Games news portal asserts that the worst part about being a Chinese gamer is having to deal with getting your IP blocked in online games because it’s based in mainland China.

Of course, mainland IP blockages only happen on overseas game servers like servers based in Korea, Japan, or the US, but there are lots of reasons Chinese players gravitate to those servers. Some games simply don’t offer domestic server options in China; other games like WoW are censored for players on domestic servers. Some Chinese gamers want to play on overseas servers to avoid the hackers and for-profit companies they say are ruining domestic game servers. And sometimes Chinese gamers just want to be part of the larger game community rather than segregated in domestic servers. But when they do venture on to overseas servers, they often log in one day to find that their IP has been blocked. Why? The QQ Games column lays out four reasons why foreign servers block mainland IPs:

1. Gold Farmers and Hackers. Most overseas gamers are in it for entertainment only, but there are some Chinese gamers and even companies that work in games to earn in-game currency and then sell it for real-life money. The most famous and well-known example of this is gold farmers in World of Warcraft, but these people exist in all kinds of games, and often, their presence upsets the larger player base. There are also Chinese companies and players that will use hacking and glitching either to procure in-game money or to steal user data that can then be sold; needless to say overseas players don’t like this either. As unfair as it is, some overseas game publishers have found the easiest way to cut down on these sorts of “professional” players is simply to block mainland Chinese IP addresses.

2. Character. The QQ Games column asserts that Chinese gamers have made a bad impression on their foreign compatriots, as some of them have been known to behave badly on overseas servers, swearing, maliciously killing other players, destroying the game environment, and even pushing Chinese nationalism. These sort of complaints about Chinese gamers are especially common among Korean and Japanese players, which shouldn’t come as a large surprised as generally speaking there’s little love lost between the three nations.

3. Attitude. The QQ Games column argues that gamers’ differing attitudes are also part of the problem, as foreign gamers tend to prefer to approach games more slowly for fun, whereas Chinese gamers tend to dive in and play at top speed for days on end. The end result is that when Chinese players are on a server, sometimes they’ve got fully leveled-up characters just days after a game has been released, and that means they’re not much fun to play with for anyone who is trying to take things slower. This also ruins the fun of leaderboards for anyone who can’t afford to play the game 24 hours a day, because it means they have no chance of ever appearing.

4. Server Space. China likely has more than 200 million online gamers, so when even a small percentage of them move onto the same overseas server, it can cause all kinds of technical problems. Beyond that, it also causes game experience problems: it’s frustrating when an American player logs into a US MMO server looking to have a social experience and discovers that everybody on the server is speaking Chinese.

Personally, I suspect the fourth reason is more significant than any of the others in causing mainland Chinese IP blocks, but there are examples of all of these reasons leading to blocks. It’s a shame that China’s gaming community, like its internet in general, is generally quite segregated from the rest of the world, but game publishers the world over are ultimately in it for the money. If Chinese gamers are crashing their servers and driving away other players, then unfortunately the IP blocks are likely to continue.

(via QQ Games)

Japan-based app Line announced today that the company has reached another milestone by hitting the 120 million users landmark, an increase of 20 million users since January. During this opportunity, the messaging company also shared its gaming app Line Play’s progress, which has gathered around six million users worldwide since its global launch last month.

Still on Line Play, the app managed to climb its way to the top two free apps spots in several countries and platforms like in Indonesia, Taiwan, Thailand, and Malaysia. The same success can’t be said about the game’s reception in Vietnam, with Line having only one million users there. Looking at the nature of Line Play’s cutesy avatars and gameplay, surely most of its six million users are female.

As we’ve said before, compared to rival KakaoTalk, Line’s key differentiator lies in its social games platform. Cho Simeon, general manager of Line Business Office, echoes that thought when it comes to Line’s push into Indonesia, saying that the gaming industry in Indonesia is growing very fast with mobile internet penetration reaching 57 percent. There are quite a few game lovers here too, with around 12 million Indonesians playing web-based games every day.

Thanks to Line’s TV ads in the country, Line for iOS and Android are now the top two chatting apps being downloaded in Indonesia; WhatsApp is another major challenger. But rival WeChat – reaching an impressive growth rate this month – is another strong contender to the title.

If there’s one thing kids love, it’s video games. Unfortunately, lots of really fun video games aren’t particularly appropriate for kids, or so says a new report on China’s gaming industry released by the China Youth Internet Association and China Youth Net. The report sums up research conducted over the course of 2012 that looked at 423 games from major Chinese game publishers like Shanda, Tencent, Kingsoft, and Netease. It concludes that China doesn’t have enough games suitable for minors.

In total, the report found that 78.5 percent of the games researchers looked at weren’t suitable for minors, and less than 2 percent were suitable for kids six to twelve. Of course, what’s suitable for minors is subjective; this report classified games with violence, crime, simulated gambling situations, or player-killing to be unsuitable for kids (among other things).

China has long been troubled by how to handle its child gamers; just last month I wrote about how child gamers need a safe place to play games that can keep them out of sketchy internet cafes. Gaming addiction can be a serious problem, but it seems a more fundamental one might be that there aren’t enough games out there suitable for kids to play in the first place. And as the report points out, this appears to be a China-specific problem. Of the many Western games rated by the ESRB, only 9 percent aren’t suitable for minors, and 67 percent were suitable for anyone over age ten. That could be the result of differing standards — I get the impression that the Chinese games were judged a little more harshly — but it also points to a lack of kids games in China’s web games market.

That’s a social problem, but it’s also a potential opportunity for mobile and web game developers looking at the China market. China’s kid gaming population may not be as big a market as the market for adult games, but it’s also not as crowded, and many parents may be actively looking for games that aren’t full of sex, violence, and gambling for their kids to play.

(China Youth Internet Association Report via QQ Games, image source)

So we decided to pick out the individuals who’ve specifically created web startups, check out their sites and services, and see what these youngsters are working on. The end result is 15 web entrepreneurs under 30 in China that we should look out for this year.

It’s noticeable that quite a few of them are working on globally-minded businesses. Here are the 15 people and their startups, some of which will be familiar to regular readers:

Zhang Lianglun

• Age: 26
• CEO, Mizhe

As we noted earlier this year, Mizhe is a unique site, a sort of online shopping guide that offers discounts for shoppers on top Chinese e-commerce sites. It raised about US$1.6 million from IDG Capital at the start of this year.

Jing.fm’s Shi Kaiwen.

Shi Kaiwen

• Age: 23
• Founder, Jing.fm

Jing.fm is perhaps China’s coolest music streaming startup and something that I use often for background music when writing. It’s a bit like Grooveshark, really.

But with Chinese consumers being so unwilling to pay up for web-based content like music – or anything digital – Jing.fm will need to find a revenue stream to keep the music flowing.

Huang Kai

• Age: 27
• Chief designer, Yoka Games

If there’s any group of online consumers in China that are actually willing to pay up, it’s MMO gamers. And that’s the target audience for the Yoka Games online store, selling real-world gaming merchandise to fans of virtual adventures.

Ji Yichao

• Age: 20
• Founder, Peak Labs

Backed by Sequoia/Zhenfund money, Peak labs is the creation of US-China educated Ji Yichao and it makes some pretty impressive apps for iOS. Chief among these is Mammoth Browser for iOS which hit the headlines in 2011 because Ji developed the eye-candy browser while still in high school. In our interview with him, Ji told us that he made the app because he felt that multi-tab browsing on mobile was a nightmare, which was certainly true at the time.

Chen Ou

• Age: 29
• Founder, Jumei

China’s daily deals industry is a tough business to be in where the top players pull in over $30 million per day in revenue, and everyone else is left fighting for scraps. That’s unless you’re a highly specialized site that ignores all those cheap restaurant deals – which is exactly what Jumei does. Instead, it focuses on deals for well-known brands of make-up and skincare items at very persuasive prices.

Lin Zuoyi

• Age: 27
• Founder, Alishunlin Furniture

This is an online furniture store that sells only its own-brand creations, with an emphasis, as the “mu” in its name suggests, on wooden items.

Liu Chengcheng

• Age: 24
• Founder and CEO, 36Kr

This tech and startup blog is a nice breath of fresh air in China’s regurgitation machine of a media landscape. Ignoring the usual copy-paste malarkey among web portals, it positions itself as a sort of Chinese-language TechCrunch with a mix of local and global tech news thrown in. We like it.

Luo Yi

• Age: 29
• Founder and president, Beely

As with the furniture business mentioned above, Beely makes its own-brand items – this time for skincare products. It’s a very tough area in which to build up trust, especially as stores and other online outlets are filled with skincare items that might’ve been mixed by a farmer with a random assortment of chemicals in a barrel. It’s difficult to see how this can work for Beely without some very specific angle – like using only organic raw materials or something.

Rick Olson

• Age: 29
• Founder and CEO, Yun.io

Laowai! Yes, there’s even a foreigner on the list in the form of the guy behind the cloud backups startup that we reviewed back in 2011. Since then, Yun.io has doubled its free storage to 10GB, but is now also up against major competition, such as Baidu’s fairly recent Dropbox clone.

Pan Hao

• Age: 29
• Founder and director, Seeed Studio

Taking on the might of Alibaba’s B2B platform for sourcing goods from China, Seed Studio focuses on one very niche area – the bits and pieces needed by electricians, engineers, and hardware hackers. All its products come from various Chinese manufacturers and are snapped up at wholesale prices by overseas buyers.

Wang Bin

• Age: 28
• Founder, Alterniva China

Alterniva is another one on this list that looks to overseas clients. It makes Flash-based physics engines for games, with an emphasis on enabling quality 3D gaming in the browser.

Wang Wenji

• Age: 27
• Founder and CEO, RabbiBox

No, this startup doesn’t bring a rabbi to your door – imagine what a mecheieh that would be – and instead delivers a boxful of childens’ toys. Following the subcom business model, monthly gift subscriptions are available for about $30 per month.

Yang Senmiao

• Age: 27
• Founder and CEO, BlingStorm

Casual games are usually a good cash-cow, and that’s the area being tackled by its iPhone and iPad games, which are free but monetize by in-app payments.

Zhang Xuhao (right). Image: ShanghaiDaily

Zhang Xuhao

• Age: 27
• Founder and CEO, Ele.me

Ele.me – which means “Are you hungry?” in Chinese – is like Rocket Internet’s Foodpanda in that it coordinates with restaurants to let people order food online for takeout delivery. It’s currently running in seven Chinese cities with an initial focus on affordable food items.

Zhang Yichi

• Age: 29
• CEO, Greedy Intelligence’s 1checker

The most unusual app on the list is 1checker, which performs online proofreading to ensure that your copy would pass muster with the most stringent of grammar and spelling nazis. Aimed at English-speaking markets, it has apps for Windows and is free so long as you register with the site.

Can you recommend any other young entrepreneurs active in China that we should check out? Hit the comments with your ideas.

Startups always seem to grow up around games. Steve Jobs used to work at Atari and Bill Gates used to love playing poker. A bunch of entrepreneurs I’ve met in Ho Chi Minh city confess to playing games together before starting companies with each other. One of Vietnam’s biggest startup successes is VNG, formerly VinaGaming. These days, that space is accelerating in Vietnam with new, smaller companies rising to the game challenge. I’ll be looking at a handful of homegrown gaming companies in Vietnam during the next few weeks – starting with this one.

Colorbox started in 2009 with seven co-founders who use to work at Gameloft. They quit to start their own project focused specifically on mobile gaming.

Today, the company has 25 people, including two of the original co-founders. Since its inception, Colorbox has had over eight million downloads for all its games across Android, iOS, Samsung Bada, Symbian, and Windows Phone. Colorbox is now considering Blackberry as well.

Last February, Colorbox received VND 10 billion (US$500,000) in investment from Cyberagent Ventures, the Japanese venture capital firm.

New games

Cyberagent is known to only invest in companies that have proven themselves on the market. And I can see why they chose Colorbox. Colorbox’s two top apps are both premium titles. Dalton, a stick figure platformer, is their most downloaded app, which goes for $0.99. The second most downloaded app is Twins Candy, costing the same, which is a mahjong and Bejeweled inspired game.

With the success of the original Dalton, the team just released Dalton 2, and also Save The Sheep.

I asked Nguyen Hoang Nam, the co-founder and current CEO of Colorbox, what’s next:

Well, with Cyberagent’s capital, we can focus more on the Vietnamese market, which until recently, was not a big market. But it has made serious strides. In terms of our games, we’ll be focusing more seriously on multi-player games and social media integration.

Colorbox has already stepped up its social media integration with Save The Sheep, a game in which you toss a beach ball at sheep in cages under a time constraint. The game has Facebook integration that allows users to have weekly tournaments and leaderboards.

Despite a history of users in Vietnam not paying for mobile apps, as I wrote about earlier today, Nam is very optimistic about the Vietnamese market.

Before, the market was small and people wouldn’t pay. But mobile payment has gotten a little easier and people are learning that paying for software is easy and good. People can now pay through SMS even.

We believe Colorbox has a new game out soon aimed at its home market, so we’ll keep you posted.

If you’d like to check out the studio’s top games, you can download Dalton 2 on the iTunes App Store. You can get Twins Candy on iOS and also Save The Sheep on iOS.

When Fast Company published its list of the most innovative companies in gaming, it ruffled a lot of feathers. One-hit-wonders Rovio (the developers of Angry Birds) topping the list seemed weird enough, but the number two spot was given over to a company many Chinese gamers don’t associate with innovation: Tencent. Here’s Fast Company‘s reasoning for giving Tencent such a primo slot:

For leveraging its online distribution network and moving into content. China’s largest online company (its QQ gaming platform boasts 200 million registered users), Tencent is the natural go-to for deploying massively multiplayer games in the Far East. Take-Two Interactive partnered with Tencent for NBA 2K Online, which launched last fall. Earlier this year, a long-term partnership between Activision and Tencent came to fruition with the arrival of the free-to-play MMO Call of Duty Online in China.

Now, even a die-hard Tencent fan might question why releasing China remakes of years-old franchises really qualifies as innovative, and China’s gaming community has been debating Tencent’s innovative tendencies — or lack thereof — ever since. The debate is the subject of Netease Games’ latest Dispute feature, which means that before we go any further I have to remind you: Netease competes with Tencent in the gaming space, so the Netease games editorial staff isn’t really coming from a position of neutrality here. But many gamers really do see Tencent as a copycat; when I searched for relevant posts on Weibo one of the first ones I found was about Tencent copying animation and sounds from the Japanese anime show Naruto for a QQ game.

In Dispute’s usual dueling essays format, Chinese gaming journalist Chang Kong defended Tencent as being innovative, saying that the company really did deserve the title for having brought together 300 million gamers. Chang’s opponent, an anonymous marketing strategist in the games industry, disagreed, arguing that most of Tencent’s own games were highly derivative, and pointing out that its most successful games were virtually all developed by other companies with Tencent merely serving as the publisher.

Gamers were also split on the subject. “[Tencent] has no integrity,” wrote one, and another observed, “When Tencent talks about innovation, all of China starts laughing.” But another commenter suggested that the negative perceptions about Tencent were the result of years of media smear campaigns.

Here at Tech in Asia, we have certainly seen Tencent play host to some egregious copies, but to the company’s credit, it does seem to take the worst of them down when it discovers them. For example, when we contacted Tencent last fall about a blantant copy of the indie game Cloudstone that it was hosting, the company quietly removed the game a week later.

That Tencent is wildly successful isn’t really up for discussion. But is the company an innovator, especially in gaming? Personally, I’m not convinced, and neither are many Chinese gamers. But let us know your thoughts in the comments!

For our coverage of previous Dispute features, click here.

Call of Duty: Black Ops

The first Black Ops game features a major mission in Hong Kong, which tasks players with sprinting through the city’s cramped hallways and across roofs during a rainstorm. It’s all very reminiscent of the real thing (except for all the gunplay, of course). And China also plays a big role in Black Ops II as a major antagonist in a new cold war.

Deus Ex: Human Revolution

Set in a future where humans can augment themselves with technology — a future that’s looking a lot closer these days, by the way — about half of Deux Ex takes place in a futuristic Chinese city. Sure, there’s a lot of dramatic license happening, but the developers did their homework, and the place does actually feel quite a bit like China even if it’s full of Blade Runner-esque sci-fi squalor. You’ll even get people shouting “Laowai!” at you on the street, just like real foreign visitors to China do!

Sleeping Dogs

Sleeping Dogs puts players in the shoes of an undercover cop in Hong Kong as he worms his way into one of the city’s most powerful triad gangs. It’s a lot like a Chinese Grand Theft Auto, and wandering around a fully-realized and completely alive Hong Kong in the game is a pretty cool way to do some traveling if you can’t afford the plane tickets. I’ve never been a triad, of course, but speeding around the city on a bike and slamming into buses because I keep forgetting Hong Kongers drive on the left side of the road is some of the most fun I’ve had in a China-based game. (I don’t have much time for gaming these days, but I’ve been slowly working my way through Sleeping Dogs over the last few months and so far it has been great).

Resident Evil 6

The latest entry in the Resident Evil series takes players to China for some of the series’ typical zombie-slaying. Sure, it’s not the best resident evil game — not even close, really — but if you want to fight zombies in China, this is probably your best bet. (Though of course there’s always Plants vs. Zombies: Great Wall Edition to consider as well).

Cursed Mountain

Cursed Mountain is a spooky survival horror game that takes place in Tibet’s Himalayan heights. Sure, it’s a Wii title so it’s not nearly as nice looking as most of the other games on this list, but in what other game will you get a chance to visit Tibet?

Uncharted 2: Among Thieves

Oh right, adventurers also get a chance to traipse to Tibet in Uncharted 2 when the game’s protagonist wakes up in a Tibetan village. If you ever wished that Indiana Jones had taken a trip to Tibet, this is the game to fulfill your fantasy.

Whore of the Orient

This one isn’t even out yet, but when it does drop sometime in 2015, it will allow players to explore early 20th century Shanghai. And given that the team behind it is the same folks who made L.A. Noire, expect a lot of attention to detail. This is one virtual China trip I’m definitely looking forward to.

Kane and Lynch 2: Dog Days

Dog Days was, by all accounts, a pretty bad game, but it was set in Shanghai and the whole game takes place in the dirty back alleys and buildings of that city. In fact, it even ends — spoiler alert — with a raucous crime spree in Shanghai’s Pudong international airport.

Army of Two: The 40th Day

The 40th Day is another China-based game that didn’t do too well with the critics. It features a masked duo of burly dudes blasting and bro-fisting their way through Shanghai. Along the way they even visit some landmarks like the Shanghai Zoo, the Bund, and a traditional temple that’s probably based on some real Shanghai location (it looks a bit like the City God temple).

And of course, these aren’t the only games with a strong Chinese influence. The latest World of Warcraft expansion, for example, is pretty obviously inspired by China, and Enslaved: Odyssey to the West is a fanciful take on one of China’s literary classics: Journey to the West. Since China doesn’t seem likely to disappear from the world stage anytime soon, expect to see more games set in China as time goes by. And, hopefully, expect to see more games developed in China making it big on the global stage!

(This post was inspired by a similar list on QQ Games)

But first, the data from the iOS App Store shows that, to quote AppAnnie:

One of the fastest growing major countries by downloads for the social networking category is China, where monthly downloads doubled from January 2012 to January 2013. In fact, now half of the category’s worldwide downloads come from the United States and China. Social Networking app revenue in China still remains very minimal, so we look forward to seeing whether publishers monetize these new downloads over the coming year.

Here’s the corresponding chart with China’s social app downloads highlighted in red:

WeChat, Whatsapp, and dating

WeChat is the sole Chinese representative on the global stage in this new monthly data. Made by Tencent (HKG:0700), it makes an appearance in sixth place:

The report notes that WeChat beats Whatsapp in terms of downloads in January, and is seeing good progress in some overseas markets as WeChat takes on rivals like Line and KakaoTalk in Southeast Asia and the Middle East. But, with no consumer-side monetization right now, WeChat makes no further appearances in other rankings. In contrast, Whatsapp, which is a 99 cents download, is second in terms of social app revenue, while Line is in pole position thanks to its paid sticker packs and social gaming platform.

As for the top 10 downloads for iOS just in China in January 2013, it’s dominated by apps for chatting and dating. A complete newcomer steals in as the top iOS download – the dating/chat app MicroLove. The smash-hit messaging app WeChat is in third place. In between is Papa, the Instagram clone that was huge last year in China thanks to one little gimmick – allowing people to post voice messages along with their photos. Tencent, which is China’s biggest web company, continues its reign with top ten spots for its IM-style apps QQ and QQ HD (8th and 9th); Sina Weibo is an interloper in seventh spot.

Star power: WeChat helps Tencent break into top global downloads ranking on iOS.

WeChat might be quiet on the monetization front right now, but then Tencent has already explained to us that it’s focusing on user acquisition and being a useful social tool.

Chinese developers lose out to Japan

Elsewhere in the report, there’s not much more from the world’s most populous nation. For a newly-risen tech giant, Chinese developers are still not really making it on the world stage. Tencent appears in ninth place among monthly downloads on iOS among global publishers, but that’s pretty much it. With so few China-made apps and games having gone global, and local smartphone users being very reluctant to pay up, the scene doesn’t look too encouraging compared to neighboring South Korea and Japan.

The Android black hole

Despite all the good work that AppAnnie does, its Android data is sadly useless in relation to China since not many Chinese consumers actually use Google Play for app downloads (and paid apps are not supported). Instead, China’s Android users turn to a variety of third-party app stores. That leaves us not knowing what Chinese Android fans – of which there are very many – are doing with their phones.

The sole Chinese publisher on the Google Play top downloads rankings is 3G.cn’s Go Launcher team, which makes an array of freeware tools and utilities. The ‘Go’ series of apps – including things like Go Weather – are popular around the world, which helped propel the developers into fifth place in terms of downloads (but not in terms of direct monetization).

It’s a timely reminder that, unlike with Korean and Japanese developers, China’s app creators cannot rely on profiting from their own populace, and have yet to muster a global blockbuster. That leaves Chinese developers struggling to monetize from other sources, like advertising or cross-promotion platforms in their home market, particularly on Android.

Line app has not just got people talking – it’s got them spending as well.

Regular readers will know that Japanese smartphone owners are great for spending money on apps. Now we have new data from AppAnnie, released this evening, that shows how the app monetization situation is developing in Japan and around the world. The report paints an interesting picture of amazing smartphone growth in Japan and Asia, along with some huge successes for Japanese social apps and games. Some world-beating achievements, in fact.

Cashing in on social

First up, AppAnnie notes that the social app category is third in terms of revenues around the world; social apps accounted for 30 percent more downloads in January 2013 compared to the previous year. Japanese app buyers are now spending nearly as much as those in the US on their iPhones and iPads:

Line app and the messaging explosion

The hit messaging app Line, made by NHN Japan, was the top social app for iOS revenue in Jansuary 2013, pipping Whatsapp to the post. With over 100 million registered users (just under half being in Japan), Line is the most downloaded social app in Japan – plus it’s the top grossing app Japan, Taiwan, and Thailand.

Line is also crowned the top non-game app in terms of monthly revenue on both iTunes and Google Play in January. It is the only Asian creation on the iOS apps list that’s dominated by American apps. Apple’s Pages app is second; Pandora Radio is third.

KakaoTalk comes out fighting against Line in the chat app battle, proving itself to be the third-best app for revenue on Android.

GungHo for gaming

As for gaming developers, Japan was once again on top. GungHo Online, with its 14 games, was the outright top publisher by revenue on iOS anywhere in the world. Its Puzzles and Dragons title was a particular hit, helping to push GungHo’s market cap to US$3.3 billion – higher than that of Zynga, or compatriot gaming rival GREE. As GungHo’s own financials point out, it made $92 million in gaming sales in January 2013 alone – a figure that’s already 30 percent of its 2012 revenue total. GungHo also sells PC games and console games, but the company recently pointed out that it’s now making more from iOS and Android.

Indeed, the report points out that Puzzles and Dragons was the top monetizing game on both iOS and Android across the globe.

Seventh on the top iOS publisher’s list is NHN (which is spread over Korea and Japan), boosted by the huge success from Line app and its social gaming platform. That’s shown with games like Line Birzzle, which rocketed to the top of iOS and Android store rankings across Asia. Let’s look at the scene on the iTunes App Store:

Asian Android domination

Even more Asian developers rocked the Android platform. GungHo was top publisher in Google Play too, with NHN popping up in second place. In fact, all but one of the leading ten publishers by revenue on Android are from Asia – it’s pretty amazing. It also shows why gaming is the best way to bring in the cash:

Other famliar names on the list include the rival social gaming platforms DeNA and GREE. Plus there’s a remarkable performance from Korea’s SundayToz team to make it into the top ten with only one game – that’s Anipang, which has been a huge hit especially on KakaoTalk’s own social gaming platform.

Anipang pops up as fourth in terms of gaming revenue on Android, just below the similar Line Pop title.

Game on for Asian developers

Ultimately, it’s a remarkable performance for Japanese and South Korean developers on both iOS and Android – breaking into social whilst also building up huge expertise in casual mobile gaming.

Japan recently passed the US to become the top country for Google Play revenue, so developers in the region can prosper among their regional audience – and break out across the globe. Well, in terms of monetizing power, if not necessarily worldwide market reach.

Japan-made chat app Line announced today that the company has released two new games onto its social gaming platform, called Dragon Flight and Wind Runner. These now work with the app in several countries like Indonesia, Vietnam, and Singapore. Interestingly, rival app KakaoTalk also has the same Dragon Flight game on its platform, but Line beat its Korea-based company in making the popular game available on many of those countries first.

Dragon Flight is a shooter game which lets you use skills, magic, and items while flying with your choice of dragon. Wind Runner is a side-scrolling running game. Both games’ objective is to stay alive as long you can while dodging or fending off enemies that come at you.

In a very short time, the games have gotten quite popular here in Indonesia. Dragon Flight is ranked fifth in Indonesia’s iTunes App Store overall games category while Wind Runner is ranked ninth.

Line up for games

In the intense chat app battleground, support for mobile games like these can play a crucial part in determining the winner. KakaoTalk currently has three games available in Indonesia, while Line now has launched 12 games here already.

Line’s thirteenth game will be made available soon in the form of TinyFarm. The minus side of having lots of games is that users get an increasing amount of social game requests from all their buddies on Line (remember how infuriating that used to be on Facebook?).

The Japanese company is playing it very aggressively here. Last month the company aired its national TV ads campaign and has so far taken the lead in Indonesia’s messaging chat app battle according to Arbitron Mobile.

Here are the links for Dragon Flight on iOS and Android. You can download Wind Runner for iOS and Android too. A Line representative tells us that Wind Runner is available worldwide except for Korea.

The Blackberry Z10 launch in Indonesia on Monday signals the launch of 4,000 apps made in the country. Yeah, that’s a very nice figure looking at the fact that Indonesia is also Blackberry’s biggest market in Asia. Kicking things off with one of those 4,000 is game developer Qajoo’s second game title, called Cak DuRae.

Cak DuRae tells the story of a chef who traced his lineage back to Indonesia and is looking to explore the culinary riches there, in particular by making awesome satays. The gameplay is quite simple as you only need to match three falling ingredients to Cak Durae’s satay sticks according to the customers’ order. There will also be dangerous falling objects like bombs for you to look out for.

The one thing that impressed me about this game is the graphic design. It looks very fun and more polished than most Indonesian-made games.

Another interesting thing is that the Cak DuRae character has Indonesian characteristics for being half-French and Madurese. The culinary dish of Madurese satay is quite famous here in Indonesia. The game also takes place in Indonesia.

Qajoo representative Nikko Soetjoadi said the reason they made the game first for Blackberry 10 is to test the market. The game is now waiting for approval for Android and iOS platforms. Qajoo’s first game title, Run Princess Run, was downloaded by over 100,000 players globally.

Cak DuRae is a premium game and will cost you $0.75 for the BB10 platform. Check out the game on Blackberry World here.

The exact selling price will be revealed at close of trading on March 5th, which is tomorrow. DeNA is currently at 2,596 yen per share at the close of Monday’s trading.

Sony’s announcement today, as caught by TheNextWeb, explains that it “is transforming its business portfolio and reorganizing its assets in an effort to strengthen its corporate structure. This sale is made as a part of that initiative.”

The Sony stake in DeNA, which amounts to 17,722,500 shares and 177,225 voting rights, will be bought by Nomura Securities.

Though $438 million is a useful chunk of cash for the struggling firm – which is now down to sales of under two million of each of its gaming gadgets in Japan – it’s not the biggest pile of money that Sony will be getting soon. That’s because Sony has also sold off one of its Tokyo office buildings for a cool $1.2 billion. Sony outlined a number of such cost-saving measures in its recent financial forecast.

Sony lost $5.7 billion in 2011. In 2012 Q1 it saw a less alarming $312 million evaporate, followed by $198 million vanishing into the ether in 2012 Q2.

DeNA, in contrast, is doing well as one of the world’s top social gaming platforms. It expanded aggressively in 2012 yet still managed $216 million in operating profit in 2012 Q3.

(Source: Sony (PDF))

Video-sharing on the PS4

Sony announced the PlayStation 4 a couple weeks ago, and it looks pretty sweet. Aside from the inevitable graphics upgrade, the console’s biggest change appears to be a strategic shift towards more online interaction. It will feature live-streaming game video and remote play so that your friends can watch as you play games, and you can even pass the controller around. All the games will be available as direct digital downloads (though discs will be available too). All in all, it sounds pretty cool.

Unless, that is, you’re a console gamer in China. That’s a small group, of course, but they do exist, and they are beginning to realize that next-gen consoles like the PS4 may offer them less than ever. Of course, they can still enjoy the HD games, but the increasing focus on online service is mostly wasted in China, for a couple of reasons.

First, because of China’s console ban, most gaming companies don’t bother to operate servers in mainland China. Consoles are still widely available in China, but playing online can be a laggy mess because Chinese players are forced to connect to servers overseas. And while digital downloads may seem like a big convenience, they’re likely to be unusable for Chinese gamers. Even if the PS4′s online store isn’t region-locked, it isn’t likely to take Chinese bank cards or Alipay. And if Chinese gamers do manage to buy something, they can look forward to an extra-long download as next-gen games are likely to be very large.

The other problem is that in general, internet speeds in China aren’t great. Even without the console ban, Chinese gamers lag (literally) behind their Asian counterparts when it comes to online gaming. Even China-based video streaming sites don’t stream video content in HD*, and it seems unlikely that current connection speeds would be able to support features like 1080p live screen sharing, no matter how well-optimized it is.

Of course, the upside of Sony’s new console is that, with its departure from the Cell architecture of its predecessor and the return to more PC-like hardware, it’s likely going to be much easier to hack. So, once again, Chinese gamers are likely to be stuck with gray market consoles and pirated games. The graphics of the next-gen consoles will be nicer, of course, but pixel-peeping gamers are already playing on PCs.

It’s a shame that gaming companies don’t do more to try to accomodate Chinese console gamers, but of course, with the country’s console ban, there isn’t much they can do. That’s a law the government should really be rethinking. There really isn’t a lot of interest in console gaming in China, but I still feel for the nation’s small but stalwart bunch of console fans.

*Many Chinese video sites do claim to have HD content, but most of what’s labeled HD is still lower-resolution than what would be considered HD in the West. I’m not aware of any streaming sites that support 1080p content, and even 720p seems to be quite rare.

Cmune, a game developer with offices in Beijing and Berlin, announced today that it has secured a new round of funding from global venture firm DCM via the firm’s Android app-focused A Fund (which gets funding and support from Tencent, NHN, and GMO). The amount Cmune has raised has not been disclosed, but it’s clear that the developers — who created UberStrike, Facebook’s most popular FPS — have big plans for the future. The company’s target is to follow in the steps of Call of Duty and become the next billion-dollar FPS gaming brand.

I got in touch with Cmune’s business intelligence chief Benjamin Joffe to ask a few questions about the company and its plans for the future. First on the list: why would a China-based developer be working on Facebook games? Isn’t that a bit awkward in a country that has blocked Facebook? Not really. As Joffe pointed out, “any serious tech company in China has a VPN.” But the company is actually moving away from the social network and towards tablets, and China has been a good place to do that. Says Joffe,

We started on Facebook and it’s still growing as the platform is maturing to better games [...] but we see now a bigger opportunity on tablets. China has great expertise on free-to-play monetization, and it’s a surprisingly good place to assemble an international team.

Of course, I also wondered whether Cmune has ever considered making a game for China’s social platforms. Joffe told me:

We have been looking into it for a long time, but the market structure and expectations are quite different. In China the popular shooters are mostly military client-based games. Very heavy and very hardcore. Our positioning is more “fantasy shooter”, mid-core, in the browser or on tablets.
This market will come in time too in China, which is why we are happy Tencent is now one of our investors [via the A Fund].

Finally, I wondered about the billion-dollar-shooter target that Cmune has set for itself. UberStrike has undeniably been successful; with 1.2 million fans and over 10 million registered players, its one of the most successful social shooter games ever. But to reach the billion-dollar level is far from easy, and thus far, the only shooters to do it have been PC/console-based shooters like Activision’s Call of Duty franchise. Is a billion-dollar shooter even possible on social platforms or tablets? Joffe was optimistic:

If you look at the pure number of users, Facebook and tablets already have more gamers on them than there are consoles out there. It is just a matter of time for creating suitable games for gamers. This is the opportunity we want to grab. To have some comparables: To reach $1B on consoles, you need to sell 20 million boxes at $50, which is the Call of Duty model. To reach $1B on tablets or Facebook you need to make less than $3 million per day.

With a management game, SuperCell already makes over $1m per day. Some games in Japan also make millions on mobile. Considering shooters are among the top selling genres on consoles, shooters will be successful on tablets too. Tablets are the new consoles!

As an FPS gamer myself, I am pretty skeptical about the ability of tablets to replace consoles and PCs, so I pressed a bit, and Mr. Joffe was kind enough to send me a list of reasons why he thinks Cmune could be the first company to take a tablet FPS into the billion-dollar range:

• There is a “learning curve” to get from a puzzle game to a hardcore game. The same happened on Facebook where the first games were text-based zombie games. Now you have 3D shooters, The Sims, and many more real-time hardcore genres.
• Tablets are now powerful enough to run a fast-paced multiplayer shooter (since iPad2, and getting better with each new device)
• Players want them, and many Premium games like Modern Combat by Gameloft are already making millions
• Most games are still single-player because real-time multiplayer is much harder to do (it’s the hardest for FPS due to sensitivity to lag)
• So it’s also a technology/backend/gameplay issue, that almost no company has solved yet. We are pioneers for that, like we have been on Facebook for over 2 years.
• Controls schemes are being improved to make it playable on touch screen.
• We found virtually no competitor in the classic Quake/Doom genre that was FREE and MULTIPLAYER at the same time. They will come eventually, but we plan to be the first and largest!

So there you have it! While I still maintain a little of my curmudgeonly skepticism, I thank Ben Joffe for talking this through with me, and I think it’s clear that whether or not there is really a billion dollars on the table. Cmune is poised to take advantage of a market that is likely to continue growing substantially over the next few years.

(By the way, if you’d like to try out UberStrike for yourself, you can check out its official site; the game is available on a number of different plaforms so no matter what device you’re on, there’s probably a way to play it.)

If cases are assessed based on imported criteria developed for groups with different cultural and social backgrounds, it could result in misdiagnosis, according to a special workplan jointly issued by 15 ministry-level authorities on Sunday.

The plan calls on researchers to develop tools to identify the early stages of potential addiction, so as to enable early intervention for minors.

China has more than 330 million gamers according to the China Internet Network Information Center, and the Ministry of Culture says gaming addiction has caused serious social problems. But is a China-specific diagnosis criteria really necessary? Are gaming-addicted Chinese really any different from gaming addicted teens elsewhere?

The answer, it turns out, is yes. Any kind of addiction is, fundamentally, a mental health issue, and according to a report from the US Surgeon General, culture can affect everything from what symptoms people report to what symptoms they actually experience (some symptoms of the same disease can be “much more common” in one culture than another ). It seems, therefore, that Chinese authorities entirely right to develop their own China-specific diagnostic criteria.

So what China-specific challenges do they face? I’m no doctor, but I can hazard a guess that the first problem they’re likely to encounter is getting gamers in the door for treatment in the first place. Culture, according to the surgeon general, can have a strong impact on whether people seek treatment. There’s still a lot of stigma associated with seeing a mental health professional in China, and gamers aren’t any more likely to seek out help than anyone else. As China’s authorities seem most concerned about underage addicts, they will likely have to factor in ways to diagnose kids who aren’t interested in getting help. Either that, or just have their parents drag them kicking and screaming to the health centers.

We’ll be looking forward to hearing more about how Chinese authorities plan to diagnose and treat addicted Chinese gamers. As gamers ourselves, we’re not fans of taking games away from kids completely, but reading the news as often as we do and seeing stories like this very frequently, it seems clear there really is a problem. Here’s hoping China can solve it.

(Xinhua via Shanghaiist, image source)

Yahoo Japan and GREE (TYO:3632) announced today what they had teased a few months back – the launch of a joint-venture company that will focus on developing and running social gaming titles for smartphones. After comitting ¥200 million (US$2.2 million) to this new gaming venture, a cat was then brought into the office and allowed to walk across a keyboard ¹, creating the joint-venture’s tentative name, GxYz.

GREE will hold 51 percent of the stake in GxYz, with the rest owned by Yahoo (NASDAQ:YHOO). Today’s announcement says that it’ll open for business on March 15th with GREE’s Tomoyuki Isaka as the CEO. The focus will be on Japanese gamers and doesn’t cover GREE’s overseas operations.

GREE is already Japan’s top social gaming platform, up against rivals as diverse as DeNA’s Mobage, Apple’s Game Center, and increasingly strong messaging apps with gaming integration, such as Line and KakaoTalk. The tie-up with Yahoo has already given GREE’s mobile titles greater exposure on Yahoo Japan, which is the country’s preferred search engine.

Today’s announcement summarizes:

Through the establishment of GxYz, the two companies aim to strengthen their smartphone social gaming business partnership, combining the user acquisition capabilities of Yahoo Japan with the social gaming development and operational expertise of GREE, while developing exceptional social games that will open up new possibilities in the game development business.

The two tech giants are already co-sponsoring Japan’s push to secure the 2020 Olympics.

As for Yahoo, we know that Yahoo Japan wants to be more social and mobile, so GREE seems like a good fit for the web portal company.

The GxYz name is not yet written in stone and could be replaced if a better one comes along – perhaps by picking letters at random from a bag of Scrabble tiles.

(Source: GREE, via TheNextWeb)

Nexon’s (TYO:3659) Q4 2012 results are just in. In brief, the Korean gaming giant did okay. Last quarter saw Nexon hitting ¥30.94 billion (US$329.29 million) in consolidated revenue which was up 24 percent compared to the same quarter last year. Operating income increased by 25 percent from the same quarter last year to ¥9.8 billion ($104.1 million) .

[UPDATE: An editorial slip-up turned the above two yen numbers into millions when they should be billions. It's all now corrected. Apologies].

Operating income margin was at 31.6 percent as more mobile gaming gave Nexon higher margins. In October last year Nexon acquired Japanese mobile game developer Gloops for a whopping $469 million. It also acquired inBlue for an undisclosed amount.

There’s a net loss of $1 million as Nexon pointed to write-downs of some of its investments and also higher tax expenses due to new Korean tax regulations.

For Nexon’s fiscal year 2012, here are the highlights from its statement:

Nexon revenues by region from its latest financials.

• Total revenues were $1.2 billion for full-year 2012, an increase of 24 percent over the prior fiscal year.

• Operating income was $513 million, an increase of 25 percent over the previous year. Operating income margin was 44.1 percent, slightly higher than the 43.7 percent in 2011.

• Adjusted net income for the year was $297 million, up two percent over last year.

It’s apparent that Nexon is looking to march towards mobile gaming with its Gloops and inBlue acquisition. It has also recently partnered up with DeNA which will see more Nexon games over at the Mobage platform for both Japanese and global users. Nexon forecasted that for Q1 2013, revenue from mobile gaming is expected to increase from $2.39 million to $80 million, a whopping 33 times higher. Seungwoo Choi, President and CEO of Nexon said:

We enhanced our mobile business through the successful acquisitions of inBlue and Gloops, positioning Nexon as the leading third-party mobile game developer globally. Since acquiring these companies, both have outperformed our expectations and each is set to deliver a strong 2013 lineup for the domestic and international markets.

Importantly, through our recent alliance, DeNA is running strong marketing promotions for our games on the Mobage platform. We expect continued strength in our PC business over 2013 as we begin to realize the returns from the large publishing deals we signed in 2012.

For now, Nexon’s businesses are very much focused on China, Korea, and Japan. North America and Europe play a small role in its revenue. Al, there’s no sign of Southeast Asia operations anytime soon.

Last week, I wrote up a story about a World of Warcraft player who caused a bit of a ruckus online after sleeping with some female guild members “for the alliance.” As I wrote at the time, the news instigated a bit of a discussion about female gamers on Chinese news sites, and many of the comments that arose were pretty disgusting and objectifying. One gamer, for example, said that it was OK to treat females in games as though they were prostitutes.

Unfortunately, I wasn’t particularly surprised to see that. I see comments like it fairly often when this topic comes up. Moreover, it’s no surprise that some Chinese gamers have a tendency to objectify women when Chinese gaming news sites are often quasi-pornographic. Take, for example, the photo spread below, which is on the front page of Netease Games, one of China’s biggest gaming portals. None of these images are actually pornographic, but a few are so close that I’ve pixellated them a bit for the sake of our readers who may be at work:

A typical photo spread on Netease Games.

Now, some of these girls are ostensibly somewhat connected to gaming in that they’re wearing the costumes of popular game characters, but let’s be honest — that’s a pretty thin excuse for plastering pin-up babes across your front page every day. And while the Western gaming community has plenty of issues when it comes to sexism, it doesn’t seem to be necessary to sell gaming news this way in the West. The front pages of sites like Kotaku and Joystiq are not consistently plastered with half-naked babes.

But as a relative outsider, I wondered if I was missing something, so I put the question to a couple of insiders in China’s game industry. To ensure their candor, I have promised not to reveal their names or the companies they work for, but both of them are high-level folks who have been in the industry for a long time and who work for Chinese gaming companies you’ve definitely heard of before. For now, let’s just call them “Mal” and “Zoe.”

When I asked about the images of women that are plastered all over gaming sites, Mal told me:

In the Chinese game market, most of the gamers are male users, therefore beautiful girls are always one of the most efficient ways to promote the game as a model of a poster or in some promotional activities. We have some statistics that show that the online ads with girls will attract more clicks from the gamers compared with other content, in general circumstances. Under the consideration of effectiveness on advertising, most games like to use girls in ad campaigns, even not all but for some of them.

However I believe the execution will be a key to determine whether this kind of “creativity” is “crossing the line” or not. For example, some games would use more proper ways to “package” girls in the marketing activities such as beauty contest, girl guilds, beautiful girl gamers, etc. instead of being very direct to the “sexism”. I guess the game companies need to have this “line” within their own marketing activities so that ensure the campaign won’t be going to the negative area.

Zoe told me practically the exact same thing:

Because most gamers are guys, using pretty girls to sell things has always been popular, because they attract eyeballs. This is also popular in other industries, like cars and electronics. But especially with browser games, users can click an ad and log in or even be making a payment instantly, so pretty girls in ads are extremely effective. There’s also too little oversight in the area of browser games so some usage of pretty girls is quite shameless and vulgar.

When I was setting up the marketing system at [major gaming company redacted], we limited how girls could be used in marketing so that it never came to anything too scandalous or pornographic. But you can’t ignore what the users want either, as long as it’s appropriate.

That sex sells is certainly not new, but to be frank I’m not sure I completely buy this argument. After all, Chinese tech news sites like the ones we read every day also have a very male-dominated readership (and probably a lot of overlap with the gaming sites’ readership), but sites like TechWeb and Sina Tech aren’t plastered with pinups.

“Zoe” explained it to me like this:

I think gamers and marketing firms aren’t intentionally being sexist towards women, but they also haven’t thought [seriously] about respecting women either.

That strikes me as pretty accurate. In the threads about that World of Warcraft gamer, for example, many of the sexist comments I noticed came from gamers who felt they were defending the girls but were actually perpetuating the all-too-common double standard that says it’s OK for men to sleep around but women are either chaste or whores.

As I said, this isn’t really a China-specific problem, although China’s gaming sites are much more pornographic than any of the Western gaming sistes I frequent. But as casual gaming catches on in China and more and more girls get into gaming, could the problem more or less solve itself as male Chinese gamers realize that females who play games are just regular women and not weird or abnormal in some way? Possibly, said Mal, but don’t count on it:

I would say if there are more and more games developed for girl/female users launched in China (such as casual games), that might be changed as the game companies needs to think more about the female users. However since [most] existing games are more male-oriented, and the statistics show that the male users are still the major revenue contributors for online games, I am afraid this kind of situation will continue for a while.