At the end of May, we hosted a free mini-summit in partnership with PocketGamer.biz at the 58VE venue in London. Exploring a topic close to Mintegral’s heart, hyper-casual gaming in China kicked off the first stand of our “The Bridge Between East and West” series seminar.
As part of the session we were joined by JoyPac, Outfit7 and Ubisoft who shared their secrets to releasing successful mobile games in Asia, based on real case studies that aimed to inspire and inform Western audiences.
In China, the super fast gaming phenomenon has swept the country. Companies such as Voodoo and JoyPac have struck it big in China’s near billion strong mobile market, racing to the top of the charts and monetising successfully with the help of advertisements.
But why are developers doing so well with hyper-casual in China? Here are five things we learned at the summit.
1) Hyper-casual gameplay = hyper-casual localisation
There’s one big reason why hyper-casual games are doing well in China: they’re easier to localise for the market.
In Deconstructor of Fun’s breakdown of Voodoo’s market success, they identified that the company was releasing significantly more games than its competitors.
This is because hyper-casual’s focus on tight core loops, short session lengths and rapid play times allow the company to compactly build a game around a lone mechanic.
This, naturally, allows their teams to make more games. But crucially for those entering China, it also reduces significantly the need to localise for a different market.
Because hyper-casual titles do not contain much text, they aren’t steeped in lore and their mechanics are based on fairly universal interactions (e.g. pressing a piano key, balancing a ball) there is less to get lost in translation. This makes it easier to take hyper-casual games to the East.
2) Ad funding avoids the worst pitfalls of Chinese regulation
The next major reason why hyper-casual strikes it big in China is that ad funded games fall outside of China’s onerous regulatory environment.
As many readers of our blog will be aware, last year’s game freeze in China jammed up the domestic market. With reforms in China’s cultural department leading to a major backlog of approvals, developers were left frustrated as they waited for their games to get released.
However, hyper-casual games were not affected by this change. The reason why is that China’s regulatory rules are applied more softly on mobile, with games that don’t have in app purchases on Android allowing to side step much of the approval process.
This means that hyper-casual companies – once registered to operate in China – are able to leap around the major regulatory hurdle. And with Chinese players casting around for new games, it means hyper-casual publishers can be their source of new releases as bigger games get held up in approvals.
3) Hyper-casual caters to Chinese cultural tastes
Another reason for hyper-casual’s dominance in the Chinese market is the way it fits into wider cultural behaviours and tastes.
On the behavioural side, hyper-casual fits into a number of relevant developments within China’s mobile industry.
For example, the creation of mini-programs – micro versions of apps that operate within WeChat that are accessed by hundreds of millions of consumers – encouraged hyper-casual titles to thrive.
The best example of this was Tencent’s Jump Jump, which drew nearly 100 million players in a matter of weeks after launching. It fitted perfectly into both the hyper-casual genre and the space created by mini-programs, driving it to rapid success.
And on the cultural side, hyper-casual titles appeal to Chinese players because they do not clash with wider concerns about over playing in the region.
As Erick Fang, Mintegral’s CEO, said in Mobile Marketing Magazine, that “growing concern in China around children and teenagers spending too much time playing what you might call ‘hardcore’ games… naturally led to an interest in developing lighter, hyper-casual games.”
Hyper-casual isn’t just a hit because it’s gotten round tight regulation; it’s also fitting neatly in with the way Chinese players want to play too.
4) CPM rates for publishers in China are high
Adverts drive the hyper-casual genre to success. Unlike the rest of the free to play economy, the hyper-casual space has a relatively relaxed attitude to retention within a single game.
Instead, studios taking the snack sized gaming approach prioritise volume of players across a portfolio of offerings to deliver enough eyeballs to generate decent advertising revenue.
Across the world, this has proven to be a successful tactic. The likes of Ketchapp and Voodoo managed to power the genre to success in Europe and the US because their player base was significant enough to generate excellent ad funded returns.
However, China differs in an important and positive way for hyper-casual companies. The territory offers a pretty remarkable CPM range of $20-$30. When set against the enormity of China’s market, such a return delivered at scale is able to lead to significant sustained success.
In short, the Chinese market is both big enough to sustain a huge hyper-casual base and receptive enough to ads to drive a great return for publishers. This is very much a winning combination for developers and publishers.
5) The market for hyper-casual is only getting bigger
The final major reason for positivity in the hyper-casual market in China is that it is only likely to get bigger in the coming years.
While mobile penetration in China is reaching something of a ceiling – hitting 97% this year – the habits of Chinese users as a whole are becoming more receptive for hyper-casual titles as a whole.
At a general gaming market level, an analysis of the top 20 games list on iOS over the past five years reveals that titles with casual mechanics account for half of the top performing titles. This is up from roughly a quarter to a third in 2013-2015, showing that mobile players are shifting more to snack sized experiences.
Additionally, Chinese players across genders are becoming more receptive to games. Amongst women, games such as Honor of Kings have helped drive uptake in gaming. This has expanded the player base but also supported the growth of casual genres such as narrative games, a trend that is broadly positive for casual title.
And amongst men in China, the trend is moving away from MMOs and MOBAs towards hyper-casual titles. As the aforementioned government crackdown on games expands into policing the time spent in popular MMOs, men are also flocking to casual, shorter play experiences.
This suggests that hyper-casual isn’t a short term fling. Instead, it suggests that it is very much here to stay in the Chinese market.
The Chinese market is uniquely suited to hyper-casual games. The combination of its tough regulatory environment, changing player preferences as a result of that and the fact that the genre significantly reduces pressure on developers during localisation makes it a comparatively easy win for games companies.
However, it’s also important not to under-estimate the challenges that could face hyper-casual companies in the sector. The Chinese ad market remains a complicated one that doesn’t comply to usual Western standards.
Therefore, hyper-casual success isn’t just about releasing a game into the market and expecting Chinese players to pick it up. Instead, it’s about taking the latent strengths of the genre and maximising it by working with the right partner.