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Gaming Posed to be Another Online Success Story in China

If Zynga's recent move to partner with a local Chinese firm to reach the country's consumers is any indication, gaming looks ready to deliver its promise of becoming a major channel there. Zynga is joining forces with Chinese internet mobile Tencent to launch a heavily localized version of CityVille for Chinese audiences, running on Tencent’s developer platform, Inside Social Games writes.

It is the first time Zynga has launched a game on a Chinese social platform, the publication said - a key step if it and its advertisers want to target China. Besides being better able to localize games for Chinese consumers, Tencent is also presumably better able to navigate the regulatory maze the Chinese government has set up to keep information and content it does not like from making its way online.

The Chinese government requires "social networks and developers to self-censor and maintain open lines with state censors in order to prevent pornography, pro-democracy speech and other illegal content from being shared among users," Inside Social Games says. "While Facebook and other tech companies haven’t yet figured out how to deal with this interference, companies like Zynga are presumably relying on their platform partners to ensure they don’t also find themselves having problems doing business in the country."

Revenues to Surge

As more firms learn to negotiate and then manage such local partnerships - which, admittedly can be very tricky as legions of other Western firms that have come and then left China in defeat will tell you — gaming will begin to reach a potential that many firms have forecasted. Juniper Research, for example, has predicted that revenues from in-game purchases will overtake the traditional pay-per-download model as the primary source of monetizing mobile games by 2013 and that the Far East & China will remain the market driving the largest share of revenues, followed by Western Europe and North America in a rough tie for second place.

Other Channels Show Promise Too

Other online channels as well are poised to expand in China, despite its stringent censorship policies. A new survey by office services firm Regus, showed that 47% of businesses successfully used social networks for customer acquisition in 2011, a 7% point increase over 2010. (via Social Media Optimization). It reported that China posted the greatest increase in customer acquisition from social networks among all countries studied - from 44% in 2010 to 65% in 2011, "a massive increase in one year," Social Media Optimization said.

Online Video Is the Model to Follow

One model these channels might follow is the online video space. It has become so popular that China's consumers are more likely to be searching for online content than watching TV with the family, according to a report in Advertising Age.

As a result branded drama series and entertainment programs have become very popular in the country, funded by companies like Unilever, Burger King, General Motors Corp., Ford Motor Co., Kraft Foods, Beiersdorf, Nokia and Anheuser-Busch InBev. CMM-Intelligence, according to Onscreen Asia, finds that online video ranks as the fifth most popular online diversion for China's internet population and is China's fastest growing entertainment medium. Onscreen Asia also cites statistics from the China National Network Information Center, which found that more than 65% of China's 338 million internet users spent a portion of their time watching videos online as of July 2009.

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