The Strategist

Mobile game developers from Hong Kong: popular but not rich

04/22/2016 - 17:42

Hong Kong is a city of entrepreneurs. It is not surprising that a lot of games are developed there, and especially mobile.

Back in 1999, fellow students from the University of Hong Kong Marti Wong Kwok-hung and Starsky Wong created the game Little Fighter 2. It had become so popular that the university servers could not coped with the influx of people wanting to download the app and. The game managed to gain a firm foothold even before the era of smartphones - Little Fighter had been hanging in the top ten most popular searches on Yahoo! Games during 3 years in a row.

The problem is that Little Fighter 2 was free, so, obviously, the developers did not become rich. Moreover, they constantly had to look for jobs just to make ends meet.

The market nowadays is very different. Thanks to services such as Steam, the total turnover of the digital copies of all types of games totaled $ 91 billion in 2015. According to Newzoo’s estimates, this figure will grow at least until 2018. In a number of Asian countries, this boom has led to the emergence of a huge number of large and indie developers. Japan, China and, especially, Hong Kong, rose to the fore in this race.

Simon Wong, Gamemiracle’s CEO and old-timer of Hong Kong game-making industry, said that many developers lacks strategic thinking. They are able to come up with an interesting product, but do not really know how to sell it. Consumers are mistaken when they call the game-makers millionaires. In fact, most of them will sooner or later go out of business. Worst of all are sales of applications oriented solely on the Hong Kong market: it is too small and fussy.  

Simon Wong suggests that the developer must think about monetization far before starting to write the game code. He made analysis of the mobile games financial prospects one of the key components of his professional activities. It's simple: you have to start the game, Candy Crush for example, and stop when you want to pay for any in-game item. If the desire appears fairly quickly, then the game is worthwhile. No matter how prosaic it may sound, the most successful projects in Hong Kong are gotten into shape this way. Analysts find monetization points, and built the whole game around them. 

The game Tower of Saviors is good example of a successful business model. In 2013, it had been downloaded more than 5 million times, bringing great income to its developers. This is despite the fact that the developers were accused of blind copying Japanese Puzzle & Dragons. At the moment, the number of Tower of Saviors’ downloads has exceeded 18 million.

Above that, there is one more suggestion: it is not necessary to experiment with new payment technologies not become popular yet. Simon Wong advised to learn from the mistakes of Blizzard Entertainment, which launched a complex auction for Diablo III. The Hong Kong's gaming guru proposes a focus on clear solutions. Blizzard, by the way, finally gave up on the idea.

Opinion of Gamemiracle’s leader has a lot of weight in the industry. Independent developers are gradually changing their approach just not to go bankrupt. The state provides grants to technology start-ups, but not to everyone. An important role is also played by associations and venture capital funds, which can give the money -  you only need to prove the project has a bright financial future.