There's an underlying fear bubbling underneath the radar at most of the world's major publishers. While there's a consistent drive to amass potent and, most importantly, profitable console IP that could be uttered in the same breath as Call of Duty or Grand Theft Auto - the kind of games that appear designed almost exclusively for their big budget reveal at E3 - there's also a feeling that many are missing out on a potentially more lucrative market, and it's a market few appear to fully understand.
The Chinese games industry has always left most of the major western publishers dumbfounded, and the nation's appetite for smartphone games, typically dominated by Android, has grown from a curious sideshow to the iOS led industry in Europe and North America to one of the main drivers behind the smartphone scene today.
Indeed, it's estimated that China's annual market revenue from gaming will hit $9.3 billion by 2017. To put that in some context, that's more than twice the amount generated in China last year and three times the figure the US is set to amass in 2015. If you're looking for growth then it's clear you've got to look East, and with consoles largely a non-entity in China thanks to restrictions on free trade, mobile is the country's first port of call outside of the PC market. Nonetheless, the number of major publishers looking to take advantage of this Chinese surge is limited.
It'll be of some surprise to many, then, that French giant Ubisoft - typically better known for console royalty like Assassin's Creed and Watch Dogs, as well as a neverending string of Tom Clancy games, has quietly been advancing on mobile in the region. Based on the information divulged by Ubisoft Mobile's head of publishing for the Greater China region, Aurelien Palasse, the publisher is very much aware that it is an unproven force in China, though it believes the freedom its healthy bank balance affords it to try out different strategies in the country is beginning to unlock many of the doors to sustained success.
It's all a mirror image of Ubisoft's advances in the global mobile arena, Palasse suggested, speaking last month at Digital Dragons in Krakow. 26 percent of all of Ubisoft's revenue now comes from its digital line up, he revealed, which includes games on iOS and Android - a far cry from when Ubisoft favoured handing over licenses to its IP to fellow French outfit and mobile stalwart Gameloft. Now, he continued, Ubisoft releases an average of ten smartphone games every year, and has 18 studios across its portfolio working on mobile games. By its own design, it's currently in its "third generation" of mobile games, having launched "premium, high quality" games where the company "didn't think about monetisation or retention" in 2012 before moving to free-to-play releases with IP such as CSI in the years that followed.
Now, in this aforementioned third stage and one that seemingly puts China front and centre, Palasse claims Ubisoft has always been aware that most mobile developers "don't make a hit with their first game", but the company is "moving into an area where we think we will." It's this determination to drive more success out of its mobile operations four years in that explains Ubisoft's great Asian experience. "Ubisoft China basically localises western content," Palasse continued, casting some light on Ubisoft's Chinese strategy, admitting that the company is able to handle most of the localisation itself. "When you think about mobile, you have to think of three main stores: Apple's App Store, which is worldwide, Google Play, which is also worldwide but isn't in China, and then what we call 'Android China'." Android China, as anyone who has looked into launching a mobile game in the country, is Palasse's way of grouping the myriad of different Android-based stores that dominate the country's mobile market.
"When you think about mobile, you have to think of three main stores: Apple's App Store, which is worldwide, Google Play, which is also worldwide but isn't in China, and then what we call 'Android China'"
While Google made Android open on a global basis from the get go, Google Play remains the top marketplace in the West despite a significant challenge from Amazon and other independent stores. In China, however, it has no presence whatsoever, and in its place are stores that, a selection of which, will sell an APK of your game even if you don't give them permission to.
It all takes a whole lot of getting used to, Palasse explained. "In China, there is no Facebook, there is no Twitter, so if you have social sharing buttons in your game they just won't work," he stated. "Also, when it comes to trailers, while western users want to see gameplay, the Chinese user doesn't care. They want to see atmosphere and they want to see environment." The share of the revenue the game generates also takes some getting used to for developers, too. While in the West developers are typically used to the platform holder taking 30 percent and the rest being split between the studio and the game's publisher (if it has one), in China the developer typically takes home the smallest slice of the pie, with the number of different parties involved meaning the developer's revenue share can be as low as 10-15 percent. Palasse noted, however, that success in China requires developers to think in a different way. The size and appetite of the Chinese market means there is the potential for a mobile game to amass far more downloads than it would in the US or Europe, and the average revenue per paying user in the country also outclasses that on offer in the West, often by a great distance.
Nevertheless, Palasse admitted a disparity in the share of downloads China makes up and the share of revenue in generates. On iOS, China accounts for 38 percent of downloads for Ubisoft, yet its revenue share is just 10 percent. Those who pay to play are happy to spend more, in short, but they are far outnumbered by the masses of downloads the game pulls in as a whole. "You should use iOS as your barometer in China," Palasse clarified. "It's easier to localise for and it will show you whether your game will work in the Chinese market." It's also comparatively easier to launch on than targeting a specific Android app store, which is why Ubisoft has decided to utilise its resources to perform something of an experiment in the region.
"Android in China is a bit out of the box, because your app is not on Google Play - it simply doesn't exist. Things would be much easier if it did," he continued, revealing that Ubisoft has "signed six different publishing deals for six different localised games to learn what works." Most of these deals have been covered, albeit briefly, in the western press, with recent Ubisoft acquisition Future Games of London having seen a Chinese version of its mobile hit Hungry Shark handled by local publisher and operator Beijing OurPalm. In contrast, Ubisoft Chengdu partnered up with OurPalm rival iDreamSky to launch Ubisoft's first mobile developed with the Chinese market in mind from day one, Monkey King Escape, in the country, while Rabbid's Big Bang hit Android in China via FL Mobile.
Though a complex strategy, each release has told Ubisoft a little more about the Chinese market and the major players that operate within it. It's an approach that few could afford to take, but the process - which also saw Ubisoft self publish one release in-house and launch one via communications platform WeChat - has also taught the company a few lessons it wasn't expecting.
"You very quickly have to learn that you're not doing one build for one store, you're doing 65 builds for 65 different stores," Palasse continued, stressing the difference between the West and China. "And even though your game has to be free, you can't make money from advertising either. Chinese stores hate advertising, and they'll remove you if they see it in a heartbeat. There are also no Google services available, of course, which can be a problem for multiplayer games, and there's no integrating billing system and there are different revenue shares per store."
"If you try to talk to them about the best graphics or marketing, they don't care - they just want to know how much they make after one day"
What stands out to the stores, Palasse contested, is a solid monetisation framework. "If you try to talk to them about the best graphics or marketing, they don't care - they just want to know how much they make after one day," he claimed. "Even critical acclaim won't help. If you don't tweak your monetisation before getting into China, you won't get in at all." So, is it even worth it? "It's a huge, huge market," he concluded. "On one of our games, we were seeing 600,000 to 1 million new users a week, stretched across 40 different stores. That's without any content updates, too."
The key to success is to "think about China from the beginning", with Palasse noting that, in comparison to the largely stagnant US market, China is enjoying a growth explosion. "The US market is saturated, although it is more difficult for a casual game to break through - the occasional match three makes it, but that's it. So why would you do it?" Though your average developer or even large publisher is unlikely to have the resources to test out the Chinese mobile scene in quite the way Ubisoft has, Palasse's answer to such a quandry to the audience gathered in Poland was as simple as it was compelling: "Well, it's the top market in the world."