This is a really smart observation and I wonder whether the Chinese development community will step up to fill this new niche.

The established Steam user base will not move over, since they have a bunch of games and friends on Steam, so Steam will continue to sell games to the West, while some other companies can indeed step-in for the East. The games might change somewhat, as did movies, but, as with movies, it won't be a huge thing.

I'm not sure if we'll even notice anything, really.

Hopefully this will mean the end of freaking zombie games. I swear to god, one more and I will throw my PS4 outta the window.

The way I see it, where ever the audience is, it's still very important where the game is made. As an Asian, Americans very rarely get Asian things right and as you know, with games like Quantum Theory and Inversion, it's very hard for Asians to get American things right. So I think successful game makers will make the game they know and love and w/e hot business model at the time will be built around the game depending on the region, not the other way around.

I think it's very hard and improved wrong to make games targeted at a market that's not your own. It's hard enough trying to make a game that your own ppl like, so trying to make a hit game for the large Chinese market is not the right approach. Some American games will hit a nerve there like some Japanese games did in the States this year and that's not by trying to make a game for an audience across the pond.

A single game can handle different business models so I think that's where the catering will happen in different regions. China is not really a fertile ground for creative work so I think game development will happen in freer places for a long time to come. I'm saying that as a Chinese person for w/e that may be worth.

You've mentioned a lot of the hurdles as to why the industry outside of China hasn't started to capitalize on the growing Chinese game playing audience and when you put them all together it's not at all that surprising why the effort hasn't been made yet to do so. There was an article several years ago on Kotaku about internet cafes in China, and if that is the most common way for people to play games then it becomes fairly obvious why many western developers and publishers haven't made any big moves to sell games to players in China. In the instances where they do, they are games made specifically for that audience, like the Call of Duty PUBG game that Jeff brought up in today's Bombcast, and Call of Duty Online. Then developers and publishers have to contend with what the Chinese government will allow for sale.

I can't find where, but I also recall an article where an indie developer was recommending other indie developers at least do localization for China because of the growing audience there and the increased presence of Steam. I don't remember if this was purely because of the number of users or if they saw a tangible increase in sales. The article you linked to about Tencent and WeGame makes it pretty clear how important a good localized version of a game at a significantly lower price can result in a bump in sales. In the end any companies that would make the kind of moves to enter the Chinese gaming market likely have a lot more information to go off of than Steam hardware surveys and if that information doesn't convince them there is probably some or many impediments to success that dissuade them. I think it's because of the uncertainty and numerous hurdles to success that many haven't made it a standard part of development to consider making and selling games to Chinese players just yet.

This isn't new. The fact that there's a massive Chinese videogame market has been evident for a long long time, but it's very fickle and the only difference is that it migrated to a game that's now on Steam. China was the backbone for WoWs success (and has been an important market for Blizzard since) and breaking into that market was considered the holy grail for MMOs for a long time. You can even look at a game like Gwent, where they're making specific efforts into competing in China.

What's important to understand though is that this isn't a massive "player" market, it's an industry. A sizeable portion of that market is businesses using games to make money. It's big dataparks grinding out items to sell or providing in-game services etc to players. It's sorta like Windows where the big market wasn't the home users, it was the endless amount of office computers. But this industry goes where the people are, not the other way around. So you see it focus on very specific games where there's money to be made. And the big money for these guys is selling services abroad to "rich westerners".

That's not to say there isn't a decent "normal" market in China as well, it still is the worlds biggest population, but this overwhelming traffic is a completely different beast and will most likely not have a major "cultural" impact on videogames (as it would've already been very evident if it did).

China has the fastest growing middle class market in earth. We've already seen the influence of this in major Hollywood productions, so it was inevitable that video games were likely to also see a change as a result. Personally, I have not always been really keen with some of the concessions and calculations in movies to market to Chinese audiences, so I'm a bit cautious about what will happen in games. It'll be interesting to see what happens, at any rate.

@thatpinguino:Thanks! Yeah I dunno, Chinese companies seem more willing to partner with American companies than Japanese ones do. At least Tencent certainly is. So maybe the projects begin more as hybrid developed type stuff. Using American's companies prior experience in the PC & console space while having some of the design work done in China to make sure it's appealing to Chinese gamers. Could be a quick way to get up and running.

e.g. this Transformers Overwatch style game called Transformers Online might be an example of how it starts. I don't know if this is being developed in house solely at tencent or if they are getting hired help from Epic etc.

http://tfol.qq.com/

as far as I know there's no Western or Japanese release planned for it. Which is pretty crazy in a way, to think a game with that kind of budget using an American brand based off Japanese toys doesn't even plan to release an English or Japanese version at launch. I know Transformers is huge in China, but they are pretty huge here too!

@twolines: I dunno man, if there's anything I've learned about gamers in recent years it's that the vast majority of them buy only the newest stuff (and a lot of times they barely even play what they buy) and only play the mega popular multiplayer games. It's not like Steam would go under, but I could see them losing their market share dominance if the hottest new games say in 2021 are coming out on WeGame first or exclusively. Same thing more or less happened to Xbox this gen. Gamers deserted them for PS4 despite no backwards compatibility. And there's even less holding them to Steam as the same hardware could be use for WeGame.

I wonder if their government will just end up banning steam and replace it and pubg with a Chinese version(knock-off). The real reason why this doesn't happen more often is because of how strict their censorship is over there usually.

@liquiddragon said:

Hey thanks for sharing your perspective man.

Yeah I agree with you, people like Hideo Kojima are pretty rare and I'd think even Metal Gear fans would say his games don't seem very "American" even though he very transparently wants to make games that appeal to Westerners . I completely agree that it's very difficult to make games period, so any additional complications (like making something for a culture you don't instinctively get) just really heightens the risk of failure.

Where I differ with you is that I think American companies may try anyway. Chalk it up to hubris, greed, caving to the demands of Wall Street what have you. There's just too much potential money at stake. And that's all it takes is some CFO type at EA, Ubisoft etc envisioning $$$ to steer the company that way.

As I mentioned to thatpinguino, I think what you could see is American-Chinese company partnerships to help get it going. The American companies might have the engineering/design experience while the Chinese companies likely are far better are navigating the regulatory, cultural and marketing aspects of their home market. At least initially it make sense for both parties, although I suspect at some point the Chinese companies eventually would no longer need the American ones once they get more experience working on these styles of games and if creative restrictions are relaxed.

You're right about a game being able to handle multiple business models. That's basically what Rocket League did in China. What I think could change if China takes over as the world's most important games market, is instead of retrofitting games designed with the West first into a mold that works for China, you could get games designed for China first retrofitted into a mold that works for the States. If you think about it, that's more or less how games were made in the 80's and 90's. Designed for Japan first and then modified to be palatable to the States. So not that crazy, but also not something today's younger US gamers are probably that used to either.

@goboard: yeah I agree with all you said. I read that article at some point about translation. and it makes total sense. I know if I were a Chinese gamer, I'd appreciate it if devs localized stuff in my language. Just good business sense to treat your customers well.

I do think it's important to consider though that just because these hurdles have been there in the past, doesn't mean they will be there in the future or can't be mitigated. As China's economy and middle class affluence continues to grow, the increasing market size alone will probably make a lot of these issues seem less insurmountable to a would be game publisher. If there's enough profit dollars or more importantly perceived profit dollars to be had, they'll try.

I think it's a pretty major change to see a game like PUBG doing well over there if for other reason than it's not a f2p game. That alone is a pretty significant change and bound to attract notice from the AAA crowd.

@ares42: So you think that this traffic is being driven by the equivalent of gold farmers in PUBG as opposed to actual players? I hadn't considered that. It's definitely possible, though I'm not sure how you could tell. PUBG cosmetics don't artificially low or anything like that on Steam marketplace. Definitely is an interesting angle to consider.

And while I have no doubt a lot of this Steam growth is driven solely by interest in PUBG, Steam's userbase in China was still growing incredibly fast before the game even existed. So I don't think that's all of it. But maybe it is the majority of it. Dunno. It'll be interesting to see in the next year if PUBG mania does down, what happens to Chinese activity on Steam.

@oursin_360: I don't see that happening in this case

I didn't know this when I wrote the OP but Tencent apparently just inked a deal with PUBG corp to officially publish the game in China last week

http://www.rollingstone.com/glixel/news/when-pubg-hits-china-it-will-fit-socialist-core-values-w512427

Which they said they will censor to appease the gov't.

""We will further highlight the teamwork and fair play spirit, making sure it’s in accordance with socialist core values and traditional Chinese cultures and moral norms,” Tencent said in a statement provided by the outlet. "

What that means for the Steam version, I have no idea. Maybe that means it gets pulled off Steam in China? dunno.

Honestly, I'd be suspect given the shady nature of steam in general. Sure, there's a major audience in China, but there are also a LOT of accounts out there to farm for money. Trading cards, in game cosmetics, everything, not just for PUBG. Asset flips on steam are so prevalent because of how pervasive the trading card thing is. With regards to PUBG, though, a rise in legitimate players (as there certainly is in all countries, especially China with it's rising prevalence in esports) would also come with a large rise in "illegitimate" players, since there's a large new market to cater to.

I'd also assume that steam is popular because, to my knowledge, China has banned use of in-game currency for certain things, but Steam doesn't really have an in-game currency per say, so that might be a loophole. All they needed was for a game on steam to get big enough to be worth it.

While there's probably no real data on it, everything I've heard or seen about what's going on with the game regarding China very heavily implies that's what's going on. And even if there wasn't a bunch of shady stuff going on the history of the Chinese market alone would make me suspicious. We know there's an industry in China doing this stuff, so when a game so suddenly and rapidly grows it either means there's a massive cultural phenomenon going on, or there's a business behind it following the money. Most likely it's a bit of both, at least that's how it's been in the past.

That's very likely what will happen. If Tencent is moving towards pushing their platform over Steam, any deal will want to be struck only for their platform. Going back to the article from VentureBeat that you posted, Tencent did exactly that with Rocket League so there's certainly precedent. In the event that it's pulled from Steam, it would be done by PUBG Corp resulting in a lot of ill will the same way it happened for Rocket League. As it is now, Steam is considered a grey market for games sold in China, so if the Chinese government decides to crack down on the sale of those games they would start by banning Steam or convincing Valve to curate a China specific marketplace. Given Valves reticence towards curating the marketplace with anything other than automated processes, I don't see it likely Valve will be willing to do this unless they stand to benefit in a way that matters to Valve. What matters to Valve gets more and more nebulous as the years go on.

While the number of Steam accounts for Chinese users has increased, if you go to the article I linked in my first post it explains a bit about how the market works for games over there. Even if the number of computers connected to the internet increases either at net cafes or by the purchase of a computer for the home, if the hardware power for the average user isn't high enough to meet the minimum reqs for most AAA games then it's not likely they would sell well enough in China as AAA is still currently focused on pushing graphical limits of hardware. Tencent is mainly focusing on indie games, per the article you posted, so any developers likely to see a benefit from pursuing that market is probably going to come from smaller developers where the focus isn't on pushing the hardware to the limit. PUBG is the current outlier from this in that it's current specs are higher than many indie games so this trend may be shifting towards higher end hardware being the norm.

On the flip side it could be as @ares42 said and the popularity of certain games only available on steam is driven by using it's marketplace to sell items farmed through play or by selling cheats, so those playing the game are doing so to bank on the many ways to make money around the game. For people who buy the game this way investing in the hardware to play the game is probably made back fast enough to offset the cost. If this ends up being more the case, and AAA developers start targeting the Chinese market, then I'd expect most of those games to include item marketplaces which means loot boxes.

It would be interesting to see the Steam hardware survey breakdown per country or region to see if this is the case. It was brought up in the thread Rorie made about the hardware survey that the drastic increase in Windows 7 for OS is due to most internet cafes in China use Windows 7 now so if everything is driven by changes at internet cafes over personal computer ownership then that will also have a significant impact on what games can or will do well in China and why they are played.

I found the article about the importance of localizing a game to its success in China. It's a lot longer than I remember and covers many more topics so you might find it interesting.

In the new Annual edition of Edge Magazine they have a really good article confirming this trend. They also mention that the Chinese government will probably start blocking Steam any day now in favor of Tencent and Alibaba's forthcoming digital games store.

(The only link I found was to buy the actual magazine)

https://www.myfavouritemagazines.co.uk/gaming/edge-annual-2018/

@slag: Everything you're saying is very analytical and logistical and makes sense me. I actually know very little about the market, haven't been there in 15 years. It does seem very fickle though, a bit like the mobile market, and I don't think we've seen its true form yet. Even though it does seem to be constantly changing, with US, Japan, and Europe, there is some maturity and a degree of predictability that risk adverse companies might eventually find comfort in after they take there risks in China. The relationship the Chinese government has with gaming, while maybe better currently than it has been in the past, I think can and will change swiftly as the country and the gaming industry develops there. I know the focus in the world is so much about the economy when it comes to China, but the people, particularly the young ppl, is its greatest resource and the government will take action to protect its most value asset. This is more of my feeling than anything else.

Also, Chinese stuff, not stuff "Made in China" but entertainment and cultural things from China aren't perceived to be cool and rarely have global appeal like American or Japanese things. So let's say all the big companies find success in China and don't focus on the market here as much. The way I see it, it's actually exciting 'cause current indie developer will just take over in the States to fill the holes. No matter how big the market gets there, it's not like the market will ever be small here.

Anyway, who knows, I guess I don't want to look at this as a negative. AAA development today isn't quite the way I remember it being in the PS2 days but the smaller games sure does balance that out in a way and positive things could come out of not being the dominate market.

Hate to say it, but I suspect Chinese developers will overwhelmingly ape (or just knock off) US games. China has been producing movies and paintings for a looooong time. Name some influential ones.

I lurked in several Chinese MUGEN communities during 2003-2005 and got interested in what the Chinese internet offers so I looked around as one might say. I can safely say that back then their internet was about just as large as the whole of North America and Europe, which means around 600 million users in total (it might be even bigger than that, as around 200 million people in europe used the internet while the numbers around around 250 million in North America as much as I remember). It was just a matter of time when Chinese people would be primarily using Steam at any case. I think there might be around 800 - 900 million people in China using the internet regulary nowadays. Furthermore, China will continue to have a growing middle class, which will mean that people will spend more time on the internet than ever before.

To see why Chinese player became so interested into PUBG, people have to find out the origins of that success, it is quite the phenomenon I can imagine.

At any case, I can add a bit to what @slag already stated. The Chinese market already gained a foothold quite a long time ago, I would say around 2 years. This can be observed by simply looking at Steam Reviews for quite literally every game on Steam so the change was already palpable. Personally I feel that the growth in Chinese user numbers on Steam is far from over and I think that the Chinese PC game market is about to fully reach Steam I think, there might possibly a big increase in the first half of the next year. It just seemed like it fully gained trajectory during this year, what we're seeing is an ongoing wave of the eastern market hitting the western one.

This surely is a very interesting time for Valve and its market. Its just another example on how globalization is bound to happen, at least if the Chinese government doesn't fully intervene.

@chaosordeal: Hard Boiled influenced Max Payne and eventually became a game of it's own in the same vein of the other John Woo movies with the release of Stranglehold. Any Bruce Lee movie leading to the popularization of Kung-Fu action movies in the 70's forward. The Matrix by way of martial arts action movies, to the point that they hired one of the best fight choreographers from Chinese action movies to do the fight choreography. Kung Fu Panda, and the list goes on.

However this was a really dumb question to begin with because this industry thrives off of copying mechanics and influences of other games, which eventually results in a game that stands above the rest.

@dray2k: Yeah, there's been a huge increase in the number of reviews and threads from Chinese users this year and a larger increase in the number of games released by Chinese developers. In general there's been an increase in users who use a variety of different languages to interact on Steam and releasing games. It will be interesting to see how Valve adapts their customer service side of things to accommodate those users and the same for developers.

@chaosordeal said:

What kind of ignorant bullshit is this?

It is indeed impressive that China is rising like that on the gaming charts but I wonder how many of this new accounts will play something else besides PUBG because "it's the game that everyone plays and I want to sell cheats and 20 USD pants"

November numbers are out and they only widen the gulf

It'd be interesting to see what the breakdown actually is. Even if, let's say, 80% of the new accounts are farming/bot accounts, the growth would still be pretty incredible.

Thanks! I have read that one already, but I'm glad you linked it again so I remember to bookmark it this time!

And man I didn't realize or had forgotten that Rorie already posted a thread on this. Dang, thanks for bringing that to my attention. Makes sense though, I found it odd this was seemingly go unnoticed. But apparently it was! So it wasn't that weird afterall.

I suspect you are right about PUBG's future on Steam in China. Be interesting to see what happens to the language numbers when it does. If the rapid growth stops or maybe even reverses some. And perhaps more importantly how does PUBG handle in game purchases made by players over there. Do they transfer over a WeGame version? I sure hope so, otherwise their players will rightfully be very upset.

I guess in reference to your point about PC specs, it makes me wonder if AAA will continue to value pushing hardware limitations. You are certainly right that's what they currently do, but that's likely because they are aiming at the US market. If there is a bigger market to be had in a more budget area due to economic/cultural/lifestyle preferences, it makes you wonder if they will shift dev priorities. It's not like EA etc don't have arms that do iOS games which are far less demanding than Console games. I suspect they will go to where the money is. As long as that's an American audience wanting the latest and most ambitious technological showcases, they will do that. But if there's a more profitable sale to be had on older specs, it would not shock me to seem them to scale back. Wouldn't be shocking to me to see an Ubisoft etc create an arm to make smaller games like a Grow Home, Valiant Hearts etc aimed at that market to get their feet wet.

But yeah makes sense Indies have a headstart advantage since their games often aren't as demanding in terms of system resources.

fwiw one of the articles I read said that Don't Starve sold over a million units on Tencent's WeGame in China albeit at a reduced price. I think the potential is there for a robust market in the next couple decades and while the Chinese market may be currently hit driven, so frankly is the rest of the World.

Oh for sure. This is all in its' infancy, nobody knows how this will play out. And I'm sure you understand the market better than I do. The only thing I feel certain of is that change is likely coming. Quite probably dramatic change. Whether that's positive or negative is hard to say. I imagine like most change it will be some mix of both.

As for stuff that's perceived to be cool, I think that sort of attitude can change in the space of a generation or less. Like what you said about the Chinese gov't . Wouldn't shock me as today's young chinese gamers get greater access to the gaming market that a dev scene takes off and starts to make things other players there find cool. And maybe that needs to happen to show the Chinese gov't that games are not a threat to their youth. Probably a lot more palatable to a bureaucrat if it's products made locally for a variety of reasons.

I think the others got you covered on why what you said just isn't true.

But even if it somehow were, Just because something may have been true in the past doesn't mean it will be in the future. America hasn't always been the dominant society on earth culturally, economically and militarily. Really we've only been king of the hill since WWII. It's not much of a stretch to think a country that has a population with significantly more people than us and nearly the same economic strength will eventually change what we consider to be Global cultural norms.

Remember Call Of Duty Online cause the Chinese sure don't. A lot of big western AAA publishers already try'd to penetrate the Chinese market without any success i even remembered Relic try'd a FTP version of Company of heroes without any success. I am gonna guess the success of PUBG in China has to do with Blue Hole being big in China + that Tencent capital for marketing made this thing blow up in china and PUBG is just a fun game to play compared to all these grindy Korean MMO's that are real big in China.

"So what is the universe in simple terms?"

"Hello, uh, I may have an answer." "The universe is a plate on the back of a giant tortoise."

"Ah but intrepid viewer, what is it that is beneath the tortoise?"

"Oh well, I'm afraid it's turtles all the way down."

@currytime:If the Chiniese government owns a lot of these cafes and the this trend benefits their bottom line, it's probably good news for the future of premium games in the Chinese market would be my thought.

@soulcake: You could say the same thing about any game that bombs here. Just because they have failed previously doesn't mean they always will or will stop trying. I'm sure there will be plenty more failures to come as American, Chinese, European, Korean and Japanese devs learn the market.

Tencent's official involvement in PUBG in China is only been in the last couple weeks. Game blew up months before so if any factors you mentioned drove its' success it has to be BlueHole's reputaution. I suspect a lot of stars just happened to align at the right time.