The mobile gaming economy has been in a state of flux for the past couple of years, and it has become quite difficult to predict what will come next. China has had its own set of unique issues, mainly stemming from the nation’s desire to rein in the market and provide more security and privacy to all parties.

Despite this, the Chinese mobile economy has continued to thrive over the past 18 months. Last year was a big one for China’s mobile scene as mobile app publishers found new audiences and explored new mobile advertising channels, many of which are here to stay — 681.7 million mobile gamers were reported in China in 2020. To add to this, the country also leads the way for gross revenue, accounting for over 35% of mobile gaming revenue worldwide in 2020.

Western publishers have taken note, but recent regulatory crackdowns have given pause to some. What can be done to quell some of these concerns and help open the market to global gaming publishers?

China’s top developers are going global

It can be argued that Chinese tech giants like Tencent and Netease have actually seen these restrictions as an eventuality and have acted accordingly by investing and acquiring global studios. Tencent alone has invested in over 30 gaming companies, including Roblox, Supercell, Riot and Voodoo.

Chinese publishers that employed a global strategy increased their revenue by 36.7% in 2020 and are seeing more revenue in international markets than in China. Some of this is fueled by publishers pivoting away from ISBN-restricted games with in-app purchases (IAP) to fan-friendly free-to-play (F2P) games with well-executed ad monetization models.

Given that mobile gaming giants such as Zynga and Scopely hold a winning formula for gaming IP as well as ample resources, there is an opening in the market for cross-platform growth. To be clear, it is an ambitious goal, but could be seen as a necessity to sustain user and revenue growth.

What Western publishers are learning from China

Publishers wanting to go East are seeing the success of Chinese studios capitalizing on intellectual property (IP) such as Journey to the West in their domestic markets. Zynga has taken notice of this and is making wise investments into the market with IP titles from Harry Potter and an upcoming Star Wars mobile game.

Kabam’s Marvel IP has also been successful, with its F2P game Contest of Champions tops the U.S. charts for licensed action mobile games. Subsequently, Kabam partnered with Netease and localized the game for the Chinese market.

Originally published at techcrunch.com

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