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August 4, 2016

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The joy in China entertainment integration

AS a veteran Chinajoy visitor, I was surprised to find that film, hardware, payments and new companies hard to define have nudged out games as the major spotlights at China’s biggest game show, held annually in Shanghai.

But then again, I shouldn’t have been so taken aback. As an industry journalist, I have been watching the steady diversification of the game industry for some time.

Chinajoy has evolved into a showcase of digital entertainment that targets the new lifestyle of a consumer audience wider than just hardcore gamers.

Industry revenue has become diversified, too, with the growing mobile games business, development of console games after a 13-year ban, new technologies like data analysis and more virtual and augmented reality products.

“A firm purely in the games business can’t grow in the new era,” Wang Feng, chief executive of Hong Kong-listed Linetone, told a Chinajoy gathering.

Besides its traditional online game business, Linetone has expanded into film production and game consoles. At the game fair, it announced the creation of a new 200 million yuan (US$30 million) fund to support domestic virtual reality content developers.

Huayi Brothers, one of China’s top film producers, has also invested in game and animation businesses, which will be integrated with its existing media services.

During the four-day Chinajoy event that ended last week, mobile game firm Kabam announced a partnership with Hasbro Inc to develop a massive multiplayer mobile game inspired by the “Transformers” toy franchise. The game will deliver action-packed “Transformers” game experiences to fans in 2017.

Kabam has a reputation for translating the world’s largest brands into successful mobile games.

Bilibili, a so-called “two-dimensional realm” website offering digital entertainment targeting consumers aged in their early 20s or younger, anticipates the potential of a huge market in the special consumer group, covering entertainment aspects of animation, comics, games and novels.

“I never doubted that China would become the biggest two-dimensional realm market in the world,” Chen Rui, chairman of Bilibili, told a forum at Chinajoy, the first in its kind held during the game fair.

He predicted it will turn from a 10 billion yuan market this year to a US$100 billion market in the future.

In that market segment, about 30 percent of fans are female, but that is expected to become more balanced going forward. By contrast, more than 90 percent of online game players are male.

The boundaries are likely to fade as entertainment, telecommunications, hardware and even financial sectors become more integrated.

For example, China Merchants Bank and Alibaba’s Ant Financial had big booths at the game fair this year.

Several years ago, the game market relied on client-end multiple-player online games for about 90 percent of its revenue. That, too, is changing.

In the first half of this year, revenue in the game industry revenue was 78.8 billion yuan, up 30 percent from a year earlier. Mobile game industry revenue was 37.4 billion yuan with a 79 percent growth rate, according to a report released by the State Administration of Press, Publication, Radio, Film and Television, the top industry regulator.

Console game revenue is expected to expand rapidly in the next few years after the decade-old ban on top consoles like Sony Playstation and Microsoft Xbox was lifted.

Top virtual reality device makers such as Sony, HTC and Baofeng released their latest products during Chinajoy.

Virtual and augmented reality are expected to be the next “gold mines” of the game industry, according to industry officials who attended Chinajoy.

New technologies like data analysis are widely used in game distribution and export sectors.

For example, Google, through its analytics and support tools like Firecase, can track demographics, engagement of users and the time and money spent on an Android app.

The real-time data provide a great advantage for application developers in targeting their audiences. Google officials said on the sidelines of Chinajoy that the app could be customized for, as one example, young users with low incomes in Brazil.

Though their services are still not available in Chinese mainland, Google, Facebook and Twitter spy opportunities to offer analytic, distribution and advertising tools to Chinese game developers with overseas publishing requirements.

Developers can then send app notifications exclusively to the users they want through Firebase Notifications or even change the way the app looks depending on who’s using it, Google said.

Alibaba, which acquired Chinese Android application developer Wandoujia last month, has used data analysis to recommend games on smartphones, based on download records and consumption behavior, said Lin Yongsong, Alibaba Game president.


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