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ChangYou investing $600 million in mobile games

ChangYou investing $600 million in mobile games

Wed 12 Mar 2014 9:15pm GMT / 5:15pm EDT / 2:15pm PDT
MobileBusinessFinancial

The Chinese online gaming firm is about to get very serious in the mobile space

ChangYou isn't a household name in the West, but in China, the online games company is well known for free-to-play titles like Zentia and Dragon Oath. The company began as an MMORPG division of Sohu.com, but the booming mobile market has caused ChangYou to take notice and now it's getting serious: to the tune of $600 million. That's how much ChangYou intends to invest in mobile games in the next few years, according to VentureBeat.

From that $600 million, $200 million will be used to acquire mobile games, another $200 million will be leveraged for marketing mobile titles, and the last $200 million will benefit mobile game developers as part of revenue share program during the next three years.

ChangYou's massive investment in the space, called the CYOU Win Plan, could make the company a serious contender in the mobile market in relatively short order.

"2014 will be an exciting year for ChangYou," said Joey Jia, general manager of ChangYou (US). "The $600 Million developer's program offers a tremendous opportunity for independent gaming developers to publish their games worldwide leveraging our expertise in both the PC and mobile space."

5 Comments

Bruce Everiss
Marketing Consultant

1,692 594 0.4
We will see more of this.
Mobile devices will become ubiquitous. There are already 700 million smartphones in China alone.
With global digital delivery to 7+ billion devices mobile content will become by far the biggest commercial intellectual property ever.
It will vastly surpass TV, movies, books, console games, ballet etc
In terms both of number of users and of revenue.

Big corporations will want their slice so will invest on a huge scale.

Posted:7 months ago

#1

Curt Sampson
Sofware Developer

596 360 0.6
Mobile devices will become ubiquitous.
Uh, Bruce, this isn't the 1990s any more. Mobile devices already are ubiquitous. As a platform for content delivery, they are either at or near the point where they have a higher penetration than anything else in terms of users.

The huge mistake you make is confusing the device with the content delivered on it. Saying that it "surpasses" books doesn't make any sense, since a paper book and a mobile book are both, at this point, ways of delivering pretty much the same reading experience. They are both components of the market for books, and in this case that market is where it is, and I don't think the publishers even care much whether they sell a paper book or an e-book, so long as they sell it and get their money for it.

Music is similar, but starts to bring out the differences. CDs haven't quite vanished, but when they do, all music will be "mobile" in one sense, in that you'll be able to listen to all your music on a mobile device. But not all music will be consumed in a mobile fashion: despite the popularity of headphones, a great deal will still be listened to on non-mobile speakers (regardless of whether you're playing it back from your iPod or from a cloud player). It doesn't even make sense to invest in "mobile" music; one just invests in the music market and more or less ignores the device.

And this is true of video content as well: even if we happen to have all our of TV and movies on a mobile device at some point, it's not made for "mobile," and there will always be plenty of people spending plenty of time viewing the content on non-mobile screens. (That may, in fact, be the majority of content viewing in the video market forever.)

And this, of course, is how you need to look at the games market as well: as a games market and not a "mobile" or "PC" or whatever market. The market really divides up in to the types of games people play, and those types may or may not cross platforms based on various technical and other limitations. You can't put Farmville in the same category as Battlefield 4, even though both are played on a PC.

The casual gaming market has certainly exploded over the past decade or so, in large part due to wider availability on mobile devices. We probably don't know yet how big that market really is. But it doesn't change the fact that there's a "hardcore" gaming market that's been around for a long time, and hasn't actually changed all that much in the past decade or so. Abandoning that market (which is not a small one) because you're confused by the fact that a delivery platform that doesn't currently work for that market has become more widespread is a mistake.

Posted:7 months ago

#2

Jakub Mikyska
CEO

201 1,101 5.5
Popular Comment
There is some interesting read for you, Bruce:
http://en.wikipedia.org/wiki/Dot-com_bubble

Seemingly endless growth potential and lavish spending can actually be a very bad news for the market.

Posted:7 months ago

#3

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@Curt Sampson

Mobile devices are nowhere near ubiquitous yet. There are around 2 billion out there for about 7 billion people. One in three is not ubiquity.

Whilst mobile is a delivery platform, so is television. Both capable of a huge range of content. But mobile will become more all pervasive, because it is a personal device that is with its owner 24/7.

Yes there is a big market for core gaming. But it has declined fairly rapidly and is migrating back onto PC to a substantial extent.

Posted:7 months ago

#4

Curt Sampson
Sofware Developer

596 360 0.6
Bruce, with two billion people out there with smartphones or tablets, the vast majority of people able to spend a few dollars a year or more on content have one. That may be only one in three of all the people in the world, but another one in three would have to give up eating for a day in order to buy a few coins for Coin Dozer. Perhaps I'm just lacking in the marketing skills you have to figure out why I should be worried about people who spend little to no money rather than those who spend substantial amounts.
Yes there is a big market for core gaming. But it has declined fairly rapidly and is migrating back onto PC to a substantial extent.
For all the noise that both core gaming is a shrinking market and that it's migrating to PC, I'm not seeing any figures at all that support either of those assertions. We see a dip in game sales once in a while due to the economy or the end of a console generation, this is widely reported, and people just ignore the fact that a couple of years later console software sales are doing better than ever.

On what figures are you basing your assertions?

Posted:7 months ago

#5

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