Global mobile gaming market has experienced tremendous growth since 2015. It has overtaken and continues to outperform PC and console as the largest gaming platform. Estimated revenue from mobile games in 2020 was $85 billion USD, accounting for 51% of the global video game revenue. With the rise of high-quality cross-platform games and popular PC/Console franchises being ported into mobile, the global mobile gaming market is expected to grow larger and more challenging. Consumers are increasingly looking for better gaming experience on mobile.
Chinese mobile games have been gaining significant presence in the global mobile gaming market
According to Sensor Tower, the top 30 Chinese mobile game publishers earned a total of $2.16 billion USD in December last year, accounting for roughly 29% of the global mobile game revenue. The revenue had increased by 45% compared to December 2019. For the month of March 2021, there were 37 Chinese companies in the top 100 mobile game publishers by worldwide earnings. Tencent, NetEase, miHoYo, Lilith Games, FunPlus, IGG, and Lingxi Games were the top Chinese mobile game developers during the month.
Leading Chinese players in the global mobile gaming market
Tencent Games (腾讯游戏)
Tencent is the largest games publisher by revenue. Its MOBA game, Arena of Valor/Honor of Kings (王者荣耀), is one of the highest grossing mobile games of all time. However, about 95% of its revenue came from China. Tencent also developed mobile versions of the popular PC/console franchises PUBG and Call of Duty under partnerships. Both games performed very well overseas. PUBG Mobile constantly hit the top grossing list worldwide, with 46.7% of revenue from overseas. While Call of Duty Mobile has generated$644 million USD so far, 44.5% of which was from the United States alone.
Tencent acquired majority stake in Finnish mobile game developer Supercell for $8.6 billion USD in 2016. Supercell has published Hay Day, Clash of Clans, Boom Beach, Clash Royale, and Brawl Stars, all of which have surpassed $1 billion USD. The studio is known for the universally appealing art styles and smooth gameplay. Tencent also owns Riot Games, the developer of League of Legends, and 48% stake in Epic Games, the developer of Fortnite.
NetEase Games (网易游戏)
NetEase is the 2nd largest Chinese game publisher after Tencent. NetEase’s most profitable mobile game is Fantasy Westward Journey (夢幻西遊), a popular MMORPG initially released on PC in 2001. The mobile version grossed $1.5 billion USD worldwide in 2017. Similar to Honor of Kings, Fantasy Westward Journey features historical and mythological elements from Chinese culture which appeal to the local audience.
NetEase also developeda battle royale shooter game, Knives Out, which seized opportunity as the first mover of the game genre on mobile. Knives Out successful broke into the Japanese market and became a mega hit. The game earned 98% of overseas revenue in Japan.
miHoYo is one of the fastest growing Chinese mobile game publishers. Founded in 2012 by three college students, miHoYo now has 2,400 employees. The studio earned $774 million USD in 2020, almost doubled from 2019. miHoYo’s recently launched action RPG, Genshin Impact (愿神), has been successful both at home and abroad. The titlehas accumulated $278.3 million and $189 million USD so far in Japan and the US. More than 70% of the firm’s revenue came from overseas. miHoYo is well-known for Japanese anime-style action games.
Lilith Games (莉莉丝游戏)
Lilith Games has less than 500 employees as of 2020. Despite that, the firm has published top-grossing mobile games in the global market including Rise of Kingdoms (萬國覺醒) and AFK Arena (劍與遠征).With the two titles, Lilith Games managed to beat Tencent and NetEase to rank first in overseas revenue for October 2019 and a few times in 2020. Unlike most Chinese publishers, Lilith Games releases games overseas first, then gradually moves them back to China.
IGG and FunPlus (趣加)
IGG and FunPlus have around 1,000 employees each. Both companies have strong global presence and consumer base. They have branches in the US, Japan, and other locations abroad. IGG’s Lords Mobile (王国纪元), an online strategy game, grossed over $2 billion USD worldwide so far, with steady monthly revenues. FunPlus reported earnings of over $1.3 billion USD as of 2019 from the two medieval-themed strategy games: King of Avalon (阿瓦隆之王) and Guns of Glory (火枪纪元). Both titles were popular in the US which made up the largest portion of earnings.
A case study of Genshin Impact: Winning markets through quality and publicity
Genshin Impact grossed $1 billion USD within 6 months after official release
Genshin Impact is a high-quality mobile game released in September 2020. It is developed by miHoYo, a Shanghai-based video game studio. The game is a big commercial success. Within the first week of release, it generated $60 million USD in revenues. In October 2020, Genshin Impact ranked No.1 in the top grossing mobile game worldwide.
According to Sensor Tower, Genshin Impact crossed over $1 billion USD in March 2021. It became the fastest mobile game to reach the 1-billion threshold, beating the global sensation VR game “Pokémon Go” which took 9 months. While China remains the biggest market in player spending, majority of Genshin Impact’s revenues come from overseas. As of now, Genshin Impact has 60 million downloads from App Store and Google Play. There are roughly 3 million people playing the game daily.
Effective pre-launch strategies and promotions have contributed largely to the game’s early success
Prior to launch, miHoYo revealed the game at E3 2019, one of the largest video game conferences where major developers and manufacturers introduce upcoming games and gaming products to the world. In June 2019, miHoYo uploaded the first official YouTube video for Genshin Impact that showcases beautiful in-game footage, raising public awareness of the game one year ahead.
miHoYo utilized and turned the pre-registration process into a community event by creating a milestone rewarding system in which players would receive more in-game rewards the more people sign up; thus, encouraging people to work together and refer the game to their peers. With this marketing campaign, Genshin Impact was able to achieve more than 10 million pre-registrations on its official website.
During the release period, miHoYo aggressively promoted the game through various online channels. The firm invested in Google Ads to reach millions of people globally with video and image advertisements that show real gameplay, story, and characters. On 28th September alone, there were more than 400 pieces of online marketing materials for the iOS version according to Social Peta. miHoYo also uses social media like Facebook, Twitter, and Instagram to advertise and engage with the audience.
Besides online channels, miHoYo also run offline advertising campaigns. In September 2020, there were Genshin Impact ads all over busses and trains in Japan. This has continued even after launch. In the West, Genshin Impact billboards can be seen in major cities such as New York, London, and Berlin. With online and offline promoting efforts, Genshin Impact managed to gather 30 million downloads in just 3 months.
Genshin Impact has a very high production value, pushing mobile gaming boundaries to the next level
With $100 million USD in budget, Genshin Impact is among the most expensive mobile games ever made. The studio started working on the game as early as in January 2017, which means it took almost 4 years to develop the first release version. Genshin Impact has a lot to offer players, including a massive open world, interesting story, seamless combat system, beautiful visuals, and soothing soundtrack. The game also has many playable characters; each has unique voiceover and qualities. Because the game itself is very high quality (comparable to PC/console games), most Genshin Impact ads show real game elements with minimal added effects.
Genshin Impact is not yet completed. In fact, it is a long-term project. miHoYo announced a plan for several future updates. These updates will be implemented every 6 weeks, adding new content and features into the game to keep players excited. According to the developer, it will take several years to complete the whole story content. miHoYo president, Cai Haoyu, mentioned that the continuing development will cost them $200 million USD every year, twice more than the initial cost to develop the game.
Genshin Impact appeals to diverse audience. According to Udonis, the gender distribution is quite balanced: 45% of the players are female, And the average player age is 35, while 27% of the players are under 25.
Monetization: A balance of free and paid aspects
Genshin Impact is a free-to-play (F2P) game that incorporates microtransactions. Players can purchase a monthly pass to receive extra rewards as they play. They can also purchase in-game currency to get items and characters from “loot box” system. Nevertheless, people can enjoy the game and access all content without having to spend anything. In fact, spending money does not affect the story and gameplay experience. The more a player plays through missions and events, the more rewards they get. Though, spending money can boost the progression as the game difficulty scales up over time. Additionally, it allows players to get resources and their desired characters faster. miHoYo managed to create a popular game that is free and fun to play, and people are willing to pay.
What make a game successful in the global mobile gaming market today
- Advertising – it is crucial in user acquisition, especially during the early stage of release. It is increasingly important for publishers to invest in online ads to reach the worldwide audience. Moreover, companies should create marketing content on social media to establish strong presence and engage with existing users. Another effective marketing channel is through sponsorship with game streamers and youtubers. Traditional advertising like billboards is more expensive, but it can be effective for mass publicity.
- Localization – localizing is not just translating languages but adapting the game to suit people in different locations, taking into account the social and cultural differences. Deep localization involves changing game elements such as interface, story, characters, dialogue, and other contents for the particular region. This can be worthwhile for the major gaming markets like the US, Japan, and South Korea. Less complex mobile games may require only minimal localization.
- Stickiness elements – creating incentive systems can improve user retention (measured by DAUs and MAUs). Strategies for retaining users including progressive rewarding gameplay, daily log-in rewards, missions, seasonal events, challenges, and social system like guilds and friends list. These stickiness elements encourage users to play more frequently and stay in game longer. However, too much of these can cause players to feel like doing a chore instead of enjoying a game.
- Monetization – F2P or freemium are the most common monetization for mobile games in 2020-2021. Releasing the game for free can help reach more users. While IAPs mechanics like “loot boxes” and “battle pass” allow developers to generate revenues. However, over-monetizing a free game can negatively impact gaming experience and player retention, resulting in a loss of player base and potential revenue.
- Competitiveness – most top-grossing mobile games today are online multiplayer which allow users to compete against each other. Competitiveness not only makes people play more, but it can also encourage them to pay for in-game items. Competitive games like MOBA can take advantage of eSports and boost game publicity through tournaments. Casual and offline games usually also incorporate some competitive elements such as leaderboard and achievements.
- Categories preference – choosing a game genre can define your success abroad as preference varies. Strategy is the most common genre among the top grossing Chinese mobile games overseas, followed by MMO, RPG, and MOBA. In Japan, people prefer RPG and simulation games with cute visuals and creative features. Whereas casual, strategy, and shooter are the main categories in the US. Because game preference changes overtime, going for the mainstream genres is safer but not always the best option.