Experienced online gaming companies won’t be surprised to hear that the industry is booming in China. What might come as a surprise though is the sectors that are driving that growth, and within those sectors the monetization opportunities that exist for savvy international online gaming brands with local knowledge and the right payment integrations.
Overall, in 2018 there were more than 300 million PC gamers in China, generating $15.21bn in revenue. By 2023, the number of PC gamers in China is predicted to be larger than the population of the United States.
The eSports market is just one example, accounting for 41 percent of PC gaming revenue. China has the highest number of eSports teams in the world. Invictus Gaming, a professional eSports organization in China, is one example of this, bringing gamers together to compete in championships around the world.
With the rise of gaming comes a growing audience of spectators too. In the world of Chinese gaming, this audience is made up of streamers, who happily reward their favorite gamers with donations, often in the form of tokens for their chosen gaming platform. On China’s biggest streaming platforms, including YY Live, Huya, and Douyu, streamers typically take 30-40 percent of the total donation, with the streaming platforms taking the rest. Both in gaming and beyond, streaming can be a lucrative business. One streamer, known as XuXuBaoBao, generated more than $10 million in user donations in 2018.
For PC gaming, the most effective payment methods deliver a smooth checkout experience by making use of the Quick Response (QR) code. Their growth was fueled by popular platforms WeChat and Alipay introducing proprietary versions, and their quick, direct integrations with mobile devices. There are even examples of QR codes being integrated into the gaming experience itself.
International companies are right to be excited about the opportunities these new Chinese gamers are creating. Before expanding into China however, there are several critical questions to answer.
International brands can’t always sell directly in China. Typically, a local license and/or partnership is required, via a branch established in China. For gaming companies specifically, you’ll need relevant licensing and copyright permissions for the game.
Chinese broadcasting associations enjoy significant control over the Chinese gaming market, so unless you’re exploring a joint venture with a local company, registering with them is an essential prerequisite to doing business in China.
WeChat Pay and Alipay enjoy more than 90 percent of the local payments market. For gaming, WeChat is often preferred – as a social media-based application, it is also be integrated directly into some gaming platforms via QR codes. Users can also connect their own personal WeChat accounts, making payments very convenient. This is especially true for Tencent games, because WeChat was also created by Tencent.
Online gaming companies looking to break through in China must offer WeChat Pay and Alipay as payment options. Alipay is particularly crucial for brands who have, or are developing, a strong web presence in China. WeChat Pay has its own advantages, by enabling payments to be made via the country’s most popular messaging application.
For more information on providing localized payments support, read our product overview.
Many gamers in China, as in other parts of the world, are 12-14 years old, or even younger in some cases. In a market that thrives on quick, easy, impulsive purchases, it’s easy to see how problems can occur. It’s critical therefore to ensure your ePayments partner has a fraud analysis system in place.
Why? Many children play games on their parents’ computers. Gaming companies should ensure they identify an ePayments partner that offers a sophisticated detection system. This will flag if a user makes an unexpected or unusual payment, for example a $100 in-game purchase of tokens or credits and can stop the purchase from going through.
When you’ve jumped through the relevant regulatory hoops and set up a successful, monetized game in China, there’s no time to rest. From its experience in China, Ingenico sees that online games typically have a lifecycle of 3-6 months. That means considering the lifecycle of your product is critical. The gaming market is filled with young people who are more than willing to hop over to the next big thing.