China is one of the biggest markets for mobile gaming, but publishers in the country face unique challenges, from strict laws to strict limits on play time. As such, success in other markets isn’t an indicator of success in China. For game makers in other countries, breaking into the Chinese market requires learning new rules and abiding by the country’s strict regulations.

In this guest post, Azur Games’ Greater China CBO discusses the struggles of bringing a game to market in China, and how Azur Games overcame these barriers.

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How we started publishing games in China: from first mistakes to first wins

In mid-2021, we announced that we’re starting to publish hypercasual games in China. It took more than a year and hundreds of thousands of dollars to lay the foundation for this process, but now we’ve already launched over 25 games. The Chinese market is very different from the rest of the world, and there were a lot of new things we had to learn.

All this in the face of ever-changing requirements for publishers and the games themselves. From this point forward, let’s talk about it all step-by-step: the mistakes, the licences, marketing features and first successes — $30 thousand a month from one project on organic traffic alone and the average playtime that exceeds an hour.

Game licence

One of the first hurdles that mobile game publishers face in China is the necessity to obtain one of two licences — ICP or ISBN. The first one is required for free-to-play games with ad monetization, the second one is for premium projects or projects with in-app purchases.

ICP is much easier to get, so for now, Azur Games only publishes hyper-casual projects with ad monetisation in China. Getting an ICP takes somewhere around a month and costs about $250 (the price varies slightly depending on where the licence is issued). And to think that just a few months ago, the fee was $100, and obtaining an ICP could be accelerated up to 3-5 days if you paid extra. Things are changing very quickly in China.

An ISBN licence is more complex and time consuming, we're still working on it. Technically, all games must have an ISBN licence, but in reality it’s required only for paid projects or projects with in-app purchases. However, this situation can change at any moment as well.

Obtaining an ISBN can take a year and a half, and the publishers who don’t have it are very likely to get fined, so if a game like that gets any attention from authorities, it’s instantly removed from the stores.
First steps and requirements for games

Naturally, there were some mistakes on our part. The first one was this: when we were setting things up, we expected to resolve a lot of issues from outside the country. Turns out, your hands are basically tied if you don’t have a legal entity registered in China.

Besides that, all the official records should be in Chinese, and you can only test games from a Chinese IP and with a Chinese SIM card. VPN isn’t going to help, since smartphones still have a ton of parameters to determine your location.

Getting legal issues in order took a lot of time, effort and money. Seemingly simple things like making a bank account, even for a registered legal entity, are very difficult — we had to hire local lawyers.

Our second mistake was writing a prefabricated universal SDK [software development kit] based on an open source solution for all Chinese stores.

There’s no Google Play in the country, and hundreds of local stores with their own advertising platforms and SDKs have taken its place. As a result, the responsibility to solve all technical issues also fell on our Chinese counterpart, and we had to integrate the SDK individually for each store. One of the reasons for this is their distrust for third-party code, which also explains why you can only integrate local monetisation solutions.

Even having solved all organisational issues, we had to meet a whole list of criteria for games that’s constantly being updated. You can’t just take a finished game that’s already performing well in the rest of the world and release it in China. There are cases when companies have been trying to launch something for the Chinese market for over a year, and the projects still don't meet all the requirements.

Here are the most common criteria:

• Peaceful games without any blood, murder, and violence are preferred. Sometimes it's enough to change the death animation to the opponent raising a white flag, sometimes you have to redo a lot of artwork.
• The game shouldn’t have religious symbolism, sexual overtones, a social agenda or connection to real-life events. Last year, more than 100 games were simultaneously removed from Chinese stores for these reasons.
• The game having an educational subtext will be a plus.

At the same time, the country is in a constant struggle to reduce the amount of time people spend in games. For example, there are laws stating that children can only play in the evenings.

In the summer of 2021, we selected the first pool of games to launch in China based on the aforementioned requirements. These were three projects in different genres — a clicker called Zoopolis, an .io game called Dragon Wars, and a hyper-casual real-time strategy called State.io.

The genres were chosen as an experiment, and we didn’t expect any quick hits, but we hoped that the metrics would be at least comparable to other markets.

It turned out that on average, day one retention for our projects in China is 10-15% lower than in other countries. In general, R1 here rarely rises above 30%, even for successful projects.

Zoopolis and Dragon Wars didn’t show any significant results in the end — now they earn less than a hundred dollars a month. State.io, however, ended up in a much better situation.

First success and new rules

Chinese stores have their own criteria for evaluating projects, and State.io immediately received an A-. This means that the platforms are ready to put their own effort into promoting the game, which really helped us at the start.

Metrics after the first tests:

• R1: 36%
• R7: 5%
• R30: 1%
• Playtime: 15 minutes

We simultaneously launched in ten stores and got featured in most of them. The lack of competing games that would have a real world map to play on, as well as nice mechanics and visuals, worked in our favor.

Also, we’ve put an emphasis on game difficulty specifically for the Chinese market. Let’s look at one case that many companies are trying to recreate. Not so long ago, a game similar to mahjong launched in the local version of TikTok. But the developers have turned up the complexity so much that only one player out of thousands could beat the second level on the first try. The game went viral like Flappy Bird, because everyone wanted to be in the 0.001% of the players who completed the level.

We reduced the win rate for State.io too. Not as dramatic, but it was enough for the ad views to grow noticeably. The game had a challenge now, and the players were motivated — they began to look for new tactics in order to beat particular levels.

At the start, the game earned $300 a day, but that number quickly turned into a thousand. Mind you, this happened on organic traffic only, since we were just starting to experiment with UA, and it didn’t have a significant impact yet.

When the metrics reached their peak, the numbers looked like this:

• R1: 45%
• R7: 7.6%
• R30: 1.9%
• Playtime: 18 minutes

For more than a year, the project performed very well, especially during the summer period — this is the most active time for players in China. But by the fall of 2022, it became clear that the project’s life cycle was coming to an end, and we suspended the update releases.

Current metrics:

• R1: 29.64%
• R7: 4.74%
• R30: 1.47%
• Playtime: 22 minutes

This being said, the game still gets featured in some stores from time to time and brings in up to $3,000 monthly.

New obstacles and lessons learned

The first three games were released in the middle of the summer 2021. And as early as August, the Chinese mobile gaming industry broke the news that the authorities had imposed even harsher restrictions, including an identity verification system to verify the player’s age. Ever since then, the market hasn’t been the same.

Many games, even the ones that were licensed, started to go into the red. Attracting users has become unprofitable due to the drop in conversion, despite the fact that the adult audience has more disposable income.

As a result, platforms began to subsidise publishers. To become eligible, you need to achieve a certain level of ROAS [Return of ad spend] and submit an application, then the store can cover the missing 20-30%. If the ROAS is too low, there obviously won’t be any subsidies.

In light of these events, we started researching the types of games that would work for us in the future and separating them according to two principles:

1. Games suitable for traffic acquisition.
2. Games we’re planning to grow on organic traffic.

First and foremost, we used the project’s performance data on other markets as a point of reference. For example, if the share of in-app purchases in the game is 90% or more, a project like this isn’t going to survive in China on organics alone. To pay off marketing expenses, you need to add interstitial ads and attract more users — if they spend even 10 minutes in the game, they should see a few ads during that time.

If the share of in-app purchases doesn’t exceed 30%, the game will probably be profitable with ad monetization in China. Especially if the gameplay calls for making eye-catching ad creatives.

We also began to select games more carefully based on the preferences of the Chinese audience. For instance, we noticed that idle games in China are aimed at a more adult female audience. In such projects, you can often find well-developed assets that are closer to casual or even midcore. Simple visuals for this genre were all the rage about three years ago, and trends are changing very quickly in China.

That’s why we launched Isle Builder, a quality idle project with nice visuals and a good story about survival on the island. In the West, the share of in-app purchases in the game is around 20%, so the game is growing on organics and has achieved the following metrics:

• R1: 32.14%
• R7: 7.14%
• R30: 3.77%
• Playtime: 1 hour 55 minutes

You need the most user-friendly experience in order to grow organically, so the game has a lot of rewards. The things the Western players are getting through in-app purchases can be obtained through voluntary ad views in China, and users can decide when to do it on their own. That’s why the game is successful on organic traffic and the playtime remains this high — nothing distracts the players from the gameplay.

The situation is different with paid user acquisition. We try to make more pop-up ads for the game to stay profitable — if a user plays for 10-20 minutes and watches a few interstitial ads, you can consider your marketing expenses paid off.

Our most successful case

An airline simulator called FlyCorp really delivered. Especially considering that the game was released after last year’s crackdown. On a surface level, it’s similar to State.io, but the gameplay mechanics are closer to Plague Inc.

Unlike other projects, FlyCorp was launched as an exclusive for one platform. Because of this, it immediately received a feature and quickly soared to the top of the charts. It was released on July 14, 2022, was in third place in the store on July 15, and climbed to the second place on the 16th. Currently, the game is still in the top 10 and continues to bring new users to the store.

During the game’s first tests, the metrics were as follows:

• R1: 31%
• R7: 2%
• R30: 0.35%
• Playtime: 52 minutes

However, the metrics rose to peak values very quickly:

• R1: 47%
• R7: 8.12%
• R30: 1.40%
• Playtime: 89 minutes

All this happened partly due to the fact that the development team managed to allocate a person who helped to quickly implement the changes tailored to the Chinese market. For example, we made high resolution maps specifically for China. In Europe, people can have the same smartphone for several years, but this is a rare occurrence among Android users in China. Here, average device specs are higher than in other countries.

We also turned all in-app purchases into rewards. At the same time, the game isn’t sustained by organic traffic alone, we manage to attract up to 20% of players on our own. We tried to increase the acquisition, but after August 2021 it just doesn’t have the same effect. Not only did the prices, offers, and conversions drop — fake traffic has also tangibly increased. That’s why we don’t spend more than $300 a day on acquisition for the time being. However, we plan to scale up marketing expenses after the last update.

At the end of September, we introduced the city mayor system to FlyCorp. This is a very important feature for the local market. The Chinese players are very fond of achievements and competition, and this update allows you to put your name on any of the hundreds of cities as a mayor and receive game bonuses for this. We have our own version of leaderboards in the form of a list of mayors every player can view. In China, we also converted this feature into rewards.

Before the update, the project metrics began to drop:

• R1: 32.38%
• R7: 3.2%
• R30: 0.25%
• Playtime: 69 min

But now they’re back to peak levels.

The game still has good potential, and the mayoral system will allow us to scale marketing, since the feature performs very well in ad creatives.

Some other interesting tidbits: the game has more than 10% of users who watch rewarded ads over 25 times a day, and the average playtime exceeds an hour.

We keep supporting the project, and are preparing new updates, features, hoping that the game will reveal its full potential in the coming months.

Final thoughts

In China, everything changes very quickly, and the oldest projects inevitably start to drop, especially after the new restrictions have been introduced. Dealing with new games is even more difficult. There are fewer players overall, so success depends heavily on the game itself and isn’t easily swayed by marketing. We began to carefully select games, study local preferences, grow our expertise and focus on new mechanics or features, because a lot has already been copied over and over and become boring.

We’re also working with Chinese publishers who have substantial experience in launching games of a certain genre — this helps us diversify user acquisition channels.

It’s important to understand that the gaming industry in China is perceived as part of the country’s cultural layer. Like the film, animation or book industry, it remains a strategic direction. So, the rules aren’t going to disappear, and you need to be able to adapt to them.

The good news is that over the summer, the Chinese government said it understood the difficulties in the industry and promised to provide support. There’s not a lot of information on what exactly they’re planning to do, but the shares of local game dev companies have already grown a little.

Edited by Lewis Rees