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New mobile virtual operator Snail Games disrupts Chinese market as it zero-rates game downloads

Also has a hardware play in the works
New mobile virtual operator Snail Games disrupts Chinese market as it zero-rates game downloads

By the own reckoning of its own VP of Mobile, Snail Games hasn't been quick into the fast-expanding Chinese mobile games market.

Yet Dahu Sun is confident about the PC publisher's opportunity to make a mark in 2014.

"2014 is the year of change and revolution in the Chinese mobile games market," he commented via translation at the China Digital Entertainment Congress, the first event of the multi-layered business and consumer-focused ChinaJoy 2014 conference in Shanghai.

Prime virtual mover

Because of this timing, Snail Games has decided on a very different approach to mobile games than other Chinese publishers.

Significantly, it's the first game company - one of 19 Chinese companies - to be granted a mobile virtual operator licence by the Chinese government earlier in 2014.

This means it's selling its own SIM cards to consumers, and crucially this means it can zero-rate game downloads, providing it with a unique selling point against other game publishers and the big three national carriers - China Mobile, China Unicom and China Telecom.

With the vast majority of China still only covered by 3G networks - 4G is being rolled out in the Tier 1 cities - the cost of data remains a big issue for many Chinese mobile users. Games are typically required to be under 50 MB for the Chinese market.

This is one of the reasons that PC-based companies such as Qihoo 360 have been able to build up their Android app distribution business as people sideload Android content from their PC.

Ready for something new?

Free game downloads are only the start for Snail Games, according to Sun, however. For example, it's already considering different retail options such as annual subscriptions.

It also recently bought iReadyGo, a Chinese portable mobile hardware company, which has released a range of gaming devices under the iReadyGo Much brand.


These devices looks rather like a phone crossed with a PS Vita, although Snail Games is aggressively looking to create an install base, with the retail price cut from an original RMB 1,699 ($275) to RMB 499 ($80).

"We will subsidise it," Sun explained. "To be successful in this market you need a successful game but to make a sustainable business you need a platform.

"These are the ways we are hoping to create loyal users for our products and services."

Yet, with an eye to the wider shifts in the market, Snail Games won't be looking to go it alone.

"It's hard for a vertical company to survive," Sun ended, referring back to Snail Games' roles as virtual operator, developer and publisher.

"Our attitude is to promote win-win. We won't become isolated. We will become more open."