Part 1: Let's start with personal experience
In the Brazil market, there is a Chinese game company that has achieved remarkable success. The company is called "Xingchen Games", and its founder, Li Ming (not his real name), was an ordinary game developer. A few years ago, he decided to take his game overseas and Brazil became his preferred target.
Li Ming's team faced a number of challenges in the early days. The cultural differences, language barriers, and high customer acquisition costs in the Brazil market all put them under pressure. However, Li Ming did not give up. By delving into the preferences and habits of Brazil players, they adapted the game content to make it more in line with the local market. At the same time, they also use AI technology to optimize advertising and target potential users.
Through continuous efforts and innovation, Star Games has gradually gained a foothold in the Brazil market. Not only did their games achieve a breakthrough in downloads, but their user activity and payment rates also increased significantly. Li Ming recalls, "We used AI technology to reduce customer acquisition costs and improve the effectiveness of advertising, which was crucial to our success. ”
The success story of Centron Games not only demonstrates the potential of Chinese game companies in overseas markets, but also provides valuable experience and inspiration for other game developers. In today's globalization, it has become a trend for games to go overseas, and how to stand out in the fierce market competition requires wisdom and courage.
Part 2: Market Trends and Data Analysis
In the first half of 2024, China's game overseas market ushered in a long-awaited rebound. According to the "Report on China's Game Industry from January to June 2024", the actual sales revenue of China's self-developed games in overseas markets reached US$8.554 billion, an increase of 4.24% year-on-year. This growth is not only exciting for industry insiders, but also brings new hope for future development.
In this report, we can see some interesting data. For example, China's mobile game revenue already accounts for 31% of global mobile game revenue. This means that one out of every three mobile gamers is playing a Chinese game. This data not only shows the influence of Chinese games in the global market, but also reflects the innovation ability and market insight of Chinese game developers.
However, an increase in market share does not mean that everything is going smoothly. Despite the rebound in the market in the first half of 2024, game makers still face significant challenges. For example, the peak of the game's overseas revenue is still stuck at $18 billion in 2021. Over the past few years, factors such as the implementation of privacy policies, Apple's ATT framework to control ad tracking, and economic uncertainty have all had a profound impact on the market.
Adjust CEO Simon (Bobby) Dussart pointed out that the decline in overall consumer spending and the continued rise in the cost of buying volume ultimately contributed to market volatility. However, he also said that the outlook for 2024 will be much more optimistic. According to Adjust, installs are growing in Q4 2023, while game launches are increasing in early 2024. These data show that despite the challenges facing the market, the overall trend is still moving in a positive direction.
Through these data and analysis, we can see that China's game overseas market is gradually recovering after experiencing a trough. In the future, with the improvement of the market environment and the advancement of technology, Chinese games are expected to continue to maintain strong competitiveness in the global market.
Part III: Costs and Benefits
In the process of going overseas, the cost of customer acquisition is an important factor that cannot be ignored. According to the latest data, the per capita customer acquisition cost of Chinese game manufacturers in the United States, Japan and South Korea has exceeded 50 yuan. This phenomenon has attracted a lot of attention and has also made many game developers feel pressured.
The U.S., Japan and South Korea markets have always been an important target for Chinese games to go overseas. According to Gamma data, these three markets account for more than half of China's overseas game revenue. However, as the market competition intensifies, so does the cost of customer acquisition. Specifically, Chinese manufacturers have the highest per capita customer acquisition cost in the Korea market, reaching US$8.02 (about RMB 58), followed by the United States market at US$7.68 (about RMB 56), and the Japan market at US$7.27 (about RMB 53).
The high cost of customer acquisition poses a serious challenge to the profitability of game manufacturers. Despite this, Chinese gaming giants such as Tencent and NetEase still maintain a leading return on investment (ROI) in the global market. Through precise market positioning and efficient advertising strategies, they have successfully turned high costs into high returns.
For example, Tencent's performance in the United States market is particularly prominent. Despite the high cost of customer acquisition, they have successfully attracted a large number of loyal users through refined user operations and strong brand influence. NetEase has achieved remarkable results in the Japan market, winning the favor of Japanese players through localized game content and precise marketing.
However, in the face of rising customer acquisition costs, many small and medium-sized game makers are struggling. To meet this challenge, they began to explore new markets and strategies. For example, some manufacturers are looking at more cost-effective markets such as Brazil and the Philippines to improve overall revenue by reducing customer acquisition costs.
In general, although the rising cost of user acquisition has put a lot of pressure on games to go global, game manufacturers can still succeed in the global market with sound strategies and innovative technologies. In the future, with the changes in the market environment and the progress of technology, the costs and benefits of games going overseas will be more balanced, bringing more opportunities and challenges to the industry.
Part IV: Challenges and Opportunities
In the process of going global, changes in privacy policies and ad tracking have brought new challenges to game manufacturers. Apple's ATT framework limits ad tracking, making it more difficult to acquire users accurately. According to Adjust CEO Simon (Bobby) Dussart, these changes have ultimately led to a decline in overall consumer spending and a continued increase in the cost of issuing volumes. However, he also said that the outlook for 2024 is much more optimistic, with both installs and game launches growing.
Faced with these challenges, game manufacturers are looking for new technologies and strategies to deal with them. AI and machine learning technologies have become important tools to reduce the cost of buying volume. Through AI technology, game companies can more accurately identify potential users and predict user behavior, thereby improving the effectiveness of advertising. For example, Liftoff is trying to use machine learning-based AI technology to more effectively identify users, predict user expectations, and ensure that "the right ads are delivered to the right individual users."
In addition to technological innovation, choosing a more cost-effective market is also an effective strategy. The relatively low cost of buying volume in markets such as Brazil and the Philippines has become a new target for many game manufacturers. According to the "2024 China Game Overseas Report", the per capita customer acquisition cost of Chinese manufacturers in these markets is less than US$1, which is much lower than that of the US, Japan and South Korea markets. These markets are not only low-cost, but also have high growth potential, providing new opportunities for game manufacturers.
Looking to the future, the game market is still full of challenges and opportunities. With the advancement of technology and changes in the market environment, game manufacturers need to constantly adjust their strategies and find new growth points. Despite the difficult road ahead, as long as they find the right opportunities and channels, game makers can still succeed in the global market.
In general, games going global not only need to face high user acquisition costs and fierce market competition, but also need to deal with changes in privacy policies and ad tracking. However, through technological innovation and market strategy adjustment, game manufacturers can still find their own opportunities in the global market and achieve new breakthroughs.