Today brought another reminder that China is on a seemingly unstoppable rise to the very summit of the mobile business. App Annie has it that, in the first quarter of this calendar year, China squeezed past the United States as the number one market for iOS downloads. That should come as no great surprise: while estimates do vary, most sources put the number of smartphone users in the country well above 500 million, and though as much as three quarters of those people have Android devices, it's all relative to the sheer size of the population. The minority in China can still outmatch the majority of most other countries - even the US.
Ultimately, that is very happy news for this industry, because - just as in Europe and North America - games are the dominant app category on mobile in China. Mobile game revenues more than doubled in 2014 according to some reports, and almost-but-not-quite doubled according to others. It's the kind of growth that's difficult to ignore.
"The Asian companies are playing in our markets. Tencent is active in the US, Nexon is active in the US, and you can go on and on and on"
And Warner Bros. Interactive Entertainment is paying very close attention. Greg Ballard, WBIE's senior vice president of Digital Games, has spent the last two years setting up a new studio in San Francisco, assembling what he calls "a sort of all-star gathering" of people from all over the free-to-play mobile business. The ambition is to compete with the companies that lead this part of the games industry, and Ballard believes that, if any company wants to do that in 2015, it had better start looking east.
"It's very important," he says. "I believe, and I think we believe this as a company, that if you're not a player in Asia right now you are by definition a regional player.
"The Asian companies are playing in our markets. Tencent is active in the US, Nexon is active in the US, and you can go on and on and on. They are global players, so to avoid being a regional player we now have to be in Asia as well. The opportunity is huge."
It is GDC week, and a great deal of Ballard's time will be spent meeting with companies from several Asian countries. WBIE now has a dedicated branch in Japan that will operate as a mobile publisher in that most lucrative of markets. In Korea, it has owned a chunk of a developer called inPlay since December 2011, which develops games based on Warner Bros. IP to be published all over Asia. This year, though, the trend is very clearly towards China, which Ballard admits is not as mature as Japan on paper, but has the potential to become even more lucrative in the near-term.
"In fact, I had breakfast this morning with a potential Chinese partner," Ballard says, just one of many discussions about partnerships and co-production deals he will take this week. "They're all here, at GDC. That's the interesting thing. There are a lot of Chinese companies here."
"Tencent valued Riot Games not just on Western sales. It knew it could take it to Asia, and it bought one of the prize game companies of all time"
That Chinese companies have taken an active commercial interest in the North American and European games markets is hardly new information, but Ballard sees an imbalance. Investments and acquisitions like Tencent's deal for Riot Games and that big chunk of Epic Games stock make the headlines, and far more often than examples of American companies making similar investments in China.
"When the Riot sale happened, if you looked at the US companies bidding, they were valuing the company based on Western sales," Ballard says. "Tencent valued it not just on Western sales. It knew it could take it to Asia. It could justify paying that higher price without stretching any evaluation parameters, and it bought one of the prize game companies of all time."
With the San Francisco team in place and new WBIE boss David Haddad a "big supporter" of increasing its operations in Asian markets, Ballard expects that to become a significant part of what his job entails. In order to challenge King, Supercell and GungHo at the very summit of the mobile gaming market, making progress beyond the borders of Europe and North America is now an imperative.
"For a company like Warner to continue to be a major player [in games] we have to be global, and for the first time that's possible because of mobile," Ballard says.
"Those guys got there first with great games, and they've retained their users very effectively. I think what we'll see now is a wave of companies entering [the market] with bigger brands, in the hope that we can, if not dislodge those games as leaders, then at least sit beside them. We've watched other [companies] and learned from their experiences. We hope to be one of the leaders in the business over the course of the next year or two."