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Atrayo's Oracle

This blog site will mostly be used as cross posts from my main blog site "Atrayo's Oracle" regarding the games industry in general. Such posts will be on probable innovations, if not other generalized points of view.

Author: Atrayo

Games Industry Prediction: China Overtakes West In AAA MMO Games In 5-10 Yrs.

Posted by Atrayo Monday May 17 2010 at 4:54PM
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Hello All,

For some my prediction may not be one at all due to the plethora of MMO (Massively Multiplayer Online) game titles the Chinese are churning out each year. However in my opinion that's just an attempt to throw wet paper at the wall to see what sticks. From such a business strategy the Chinese will surely profit in 5 to 10 years time learning from the growing pains to follow. On how to: design, build, maintain, and hopefully prosper the MMO genre game market.

The past five to ten years the other Asian countries of Japan & South Korea will inadvertently open the door for the Chinese and Indian game developers. Allowing them to penetrate into the Western consumer pocketbooks. Notable success stories of Sony on the Japanese side if not other game companies such as Sega. Be it the video game console business or the MMO market with "Sony Online Entertainment". With South Korea's "NC Soft" in their line-up of MMO quality game titles.

Within the last five years or so Western game publishers have opened game studios be it in China or India respectively. Where the talent (labor) and costs of running a studio is cheap compared to the West. The quality of the staff is just as good if not superior in some respects. Consider the Chinese and Indian game studios are in the "training wheels period" learning what they can from their Western counter-parts. Expect all this to change within the next five years however as fledgling game developers start to launch in China & India.

One of the undercurrents I make such a prediction is the Chinese in particular will revolutionize group / population game dynamics and structures. The West has approached the player mentality of game design in a mindset of the rugged individualistic personal hero / heroine. The Chinese due to real factors of population densities in their country with a billion plus citizens. Will usher forth key group / niche game play for the masses in MMO game genre. The dynamics of such game design will be from the back end infrastructure down to how game play will effect groups of players in a structural form.

Already the Chinese game market has influenced the Western MMO market with the introduction of the F2P (Free to Play) business model. F2P in China was developed due to income restrictions and easy access to population density in the cities. The West's adoption hasn't been on the same grounds however as in the East. Here in North America it may have been because of the economic turmoil due to the "Great Recession". Although the transition has not been fully adopted offering a hold over voluntary game subscription business model. In order to garner access to better quality items and/or loot in game play. This is aside from the mirco-transaction item malls introduced as an e-commerce presence to the game in the F2P business model.

These 5 to 10 year range expect Chinese and Indian game developers to offer AAA MMO game titles to the West. The Indians will take they're cue from the Chinese in game design styles and methods in launching such enterprises. Such as the typical Chinese or Indian MMO game titles will be steeped in their own cultural mythology for themed game worlds. So expect High Fantasy themes as the easy bet until they mature in styles. Where they will offer other themes be it science-fiction or historical periods when they have planted their roots firmly into the Western game markets.

MadnessRealm writes:

I disagree. So far, China has proven completly unable to make any type of game that can be seen as "relatively fun". It's subjective but still.

Everytime a new "innovative" game enters the Chinese market, they copy it. And that's the country's limit and it's not restricted to MMOs. China has been well-known for for Industrial "espionage". They learn the techniques and copy it, but are unable to create a better product, only a cheaper product. That's their limit.


Perhaps it's their government structures that has limited the country's growth, because there is indeed a large amount of potential workers that could come up with "the next big thing", but I don't see that happening until the day they ditch their current government structure.


And for that reason, I highly doubt China will ever overtake West market. Especially in the next 10 years, there's something big that's going to happen, can't say when exactly but that might "destroy" China.

Tue May 18 2010 7:22AM Report
Aristides writes:

Although he brings up one very interesting point in alluding to sociopolitical issues outside the game industry itself, I fear MadnessRealm is mostly ignoring history.  What kind of car do you drive, if I may ask, MadnessRealm?


I'll draw a parallel: In the 60's and early 70's, Japanese cars were known as cheap crap.  Recent "beat on the leader" press aside, Japanese cars now have a reputation for affordability, efficiency and quality.  This happened because their auto industry learned from the American and European industries, and improved upon them.


China is positioned to accomplish much the same thing, in many areas, not just games and manufacturing.  If anything, the sociopolitical "big event" you allude to may help them do this, if indeed it doesn't sabotage their efforts to renew their society and grow their economy.


Many  friends of mine have attended game industry conventions and shows in China, and their reports are sobering.  It costs a Chinese developer less than a tenth as much as a North American developer in overhead in order to maintain staff for a game project.  Also, Chinese game company executives are far more interested in learning about Western management techniques (which we talk about freely) than in our technical prowess or intellectual property.  Lastly, their business practices can be pretty cutthroat:  some of the larger publishers are known for making a pretense of interest in your product order to get access to a prototype, which they then re-engineer and with which their in-house development team beats you to market, at least within China (and you have zero legal recourse to prevent this).


The sheer number of these companies, and the rate at which they are growing, makes it very, very easy for me to believe in Atrayo's predictions.  I think the argument that they can't "innovate" themselves is based on faith, not reason.  Or possibly a bit of unfair bias.  Give them a little more time.


And the important thing to realize - they do not care at all if their games do not appeal to the Western market and sell successfully here.  The market within China alone is several times larger than the NA and EU markets combined, and it is still growing as the Chinese technical infrastructure is extended.  They almost cannot help but conform to Atrayo's prediction, based on inertia and conservative estimates alone.

Tue May 18 2010 5:49PM Report
MadnessRealm writes:

I actually don't drive a car but I get your point.


That said, your last paragraph sort of contradicts your whole post and Atrayo's point which is that China will overtake West in AAA MMOs. If they do not care at all about appealing to the Western market, then they have no chance of overtaking the MMO market in the West, let alone the AAA MMO market.


Of course it is true that it cost a lot cheaper to make products in China, but the quality heavily suffers. Hell, every now and then, there's a recall on certain Chinese product ("baby toys containing lead" comes to mind). The quality of the MMOs they have released so far as also been sub-par and shows no sign of improvement. There' s a few companies simply re-using the same engine, graphics and model but bring slight modifications and then publish it as a new MMO.


That's not all, if you recall the recent issue with the Chinese Government that affected World Of Warcraft/NetEase last year, it shows a lot about how China works. It's really not a bias, but all the informations I know about China simply leads me to believe that I China won't be able to overtake the Western MMO market.

Tue May 18 2010 6:53PM Report
Atrayo writes:

Hi Guys,

Thanks for your comments.

Following up on what Aristides stated towards end of his post. While the Chinese are in growing pains with present day sub-par MMO game titles. Anywhere from 5 to 10 years time i can foresee them having at least 1 major break out game that will adopted by Western gamers.

If that occurs than expect a "foothold" situation to happen allowing subsequent Chinese MMO's to come across in popularity.

Regarding your comments MadnessRealm about the WoW / NetEase lisencing difficulty last year. It goes to show that the Chinese government wants to muscle out as much as possible foreign MMO's. They want to corner their own local market for the nascient Chinese game publishers.

That stated the Chinese wouldn't mind having their games accessed here in the West. Yes, it's unfair. But that's the world of global commerce and trade agreements for you.

Wed May 19 2010 4:35PM Report writes:
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