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Annual Report on China’s Mobile Game Market 2006
Analysys International, Aug 2006, Pages: 80
Findings and Recommendations Analysys' Findings
The market size of mobile game in China reached 1.434 billion Yuan in 2005, an increase of 78.3% over previous year. WAP, JAVA and BREW mobile games have grown rapidly. The proportion of message game dropped by a large margin from 60.9% in 2004 to 33.7% in 2005, and its market size of message game was 483 million Yuan in 2005, which will see slow growth and tend to decrease after 3G is put to business use.
The market value of mobile game was overestimated in 2005 and the market experienced the first market consolidation period. As the penetration rate of 2.5G terminal was still low, the supply of game products are far from satisfying user needs. Consumers haven’t formed the using habits, and the business mode was still one fold. Therefore, though the market size of mobile game kept expanding, its growth rate fell short of the anticipation of the industry.
Operators play the dominant role in current industry chain of mobile game to provide network operation support, administrate the whole industry, and guide the operation, including game pricing, content approval, and collection charge. Operator’s dominant position in industry chain determines the huge influence of operator’s administration and market strategy on this industry. However, mobile operators have done far from enough in market investment. The headquarters haven’t invested sufficiently, and local mobile companies do not perform effectively. Operators conduct centralized management and uniform operation on mobile game. As the headquarters have not taken much effort to promote and local operation companies are profits-oriented, local companies are negative to invest in mobile game.
Presently the business mode of mobile game industry is immature. There is no mature mode to inspirit CP/SP, mobile and channel vendors to promote the development of mobile game, to do market promotion and develop users.
The competition is fierce in mobile game market and involves domestic game developers as well as overseas ones, especially new game developers based on smart phone OS. Medium and small-sized SPs need to survive the fierce competition. Though game developers, game application and service providers begin to attach importance to market publicity and promotion, their still lack of effective way to improve user experience and using habit forming.
The charging standard of mobile game products is one fold without diversified price choice. Currently the quality of game products is rough in pursuit of low cost and immediate interests. Product designs, from game scheme design to task design, are defective. How to understand users needs and develop popular products, how to keep the stickiness of mobile game products become more pressing issues.
In China’s mobile game market today, SPs which are relatively small and weak are driving market development actively. As mobile operators have strict control over SP and lack of flexibility, creative SPs are restricted in mobile game market.
Currently the cooperation mode of China Mobile, China Unicom and mobile vendors is rather loose. Operators have limited influence on mobile vendors. Now the specification of custom mobile is limited in client interface and menu design.
As mobile operators do not participate actively, SP and mobile vendors, SP and mobile channel vendors, mobile vendors and mobile channel vendors attempt to cooperate in mobile game promotion and sales. However, the cooperation mode is still one fold and is restricted.
Analysys' Recommendations
Recommendations for SP and CP
Target at market segment, analyze the needs and preference of users. how to attract users to accept and like to play mobile game, how to keep the stickiness of mobile game products should be taken as key issues during product development. It is suggested that the charging method should be considered during mobile game product design, and establish corresponding charging system and channel.
For mobile game market, technical and capital barrier to entry is low. The advantages of SP mainly lie in products, brand and users, so it is suggested that mobile game software developers, application and service providers should also attach importance to market publicity and promotion, brand and user fostering while paying attention to product R&D.
According to product characteristics and usage features of mobile game, multiple charging standards of mobile game, such as rental per month, single download, single download and limit use, and single play game, should be adopted in order to increase the diversity of price choice of users.
Make full use of social resources and expand the channels to obtain mobile games. Make use of the self-build and cooperative business halls of China Mobile and China Unicom all over the country to promote and sell mobile games. Cooperate with mobile channel vendors in some second class economically developed cities as pilot. Encourage mobile channel vendors to participate in the channel construction of mobile game. Meanwhile develop diverse below-the-line channels.
With the popularity of 3G application and smart phone, the online game market expands. However, current charge mode isn't suitable for online mobile game. SP and CP should develop new charge mode and profits distribution mode.
SPs should pay attention to the quality of products, encourage innovation, improving the quality of online game, and prevent piracy. Meanwhile they should establish good and interactive information exchange mechanism in order to develop games which are more suitable to market.
Enhance promotion of mobile game through traditional channels, learn from the promotion strategy of overseas operators and choosing one or several mobile games to be promoted through traditional channel.
In regard of marketing, enlarge influence scope through match of mobile games, or establish interactive player community and increase users stickiness through viral marketing.
Recommendations for mobile operators
Increase investment in mobile game industry, integrate operator’s internal resource, and establish efficient decision-making mechanism and supporting system.
Set up fair and flexible management mechanism and support the development of industry chain. Accelerate the optimization of content approval mechanism and process of games of SPs. Set down mobile specification and expedite the approval process of mobile charge.
Strengthen market promotion. Mobile operators should take advantage of its good brand awareness, self-build and cooperative business hall all over the country, and channel partner resource. Making full use of these resources to do market promotion will drive market development most effectively.
Promote reasonable division of work in industry chain. Currently SPs which are relatively small and weak are the major forces to drive the market, which is supposed to be operators’ role. Mobile operators should actively assume their role of market propellent so that SPs and other parties can return to their advantageous position to enhance the benign development of industry chain. Reasonable division of work in industry chain can advance the healthy development of industry chain of mobile game.
As the stipulators and administrator of rules in mobile game industry, mobile operators haven’t done enough in cooperation with other parties in industry chain and remain in a passive situation. If the present situation is not improved, besides profits, operators may gradually lose their dominance in cooperation.
According to the type and quality of game products, different price levels are set, rather than only a general price range. Package mobile game services with other mobile services to sell. Stimulate usage through methods of returning phone fees and bonus encourage user to use.
Learn from game assessing mechanism of Japan and Korea. Introduce professional mobile players in game assessing team to assure fair and high quality assessment and provide professional suggestion to improve content of the games
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