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GC Asia: Understanding Asia

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By Edge Staff

September 19, 2008

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"Quality of Japanese games are way behind, compared to MMOGs from other countries"

There are some important trends coming from Asia – some of them have been talked about to death, but an early morning panel of experts at Games Convention Asia provided some fresh numbers and surprise insights.
 
Shuhei Ueda, CEO of Gamepot and chairman of JOGA, begins by talking about his country's biggest trend, massively multiplayer online games. "The trend is, since 2004, we're seeing a very rapid growth.  The market size is about a billion users," he tells the audience through a translator.
 
Ueda says there are 250 online games on the market. "In the early days of the market, Korean games used to be dominant. Now we're seeing lots of Japanese MMOs coming," he said, also saying that Taiwanese MMOs were making inroads in a country that's traditionally known as a console stronghold.
 
Meanwhile, Mario Wynands, managing director of New Zealand-based developer Sidhe Interactive, says that developers there are doing new, original intellectual property, something "quite rare for Australasia", which has traditionally focused on work-for-hire and ports. He adds: "The consumer market is growing at a steady rate."
 
Gary Mi of Radiance Digital, who's stationed in China , says that while most people know about that country's free-to-play online games, "That is not just a business model. Game designs are changing…evolving around that concept."
 
Mi reports that because the games are free, developers are concentrating on how you make people come back. "This is a fundamental trend that's changing."
 
Local developers know their market, Mi says. "They really know how to address their audience." The result, he explains, is that it's now difficult for American developers trying to simply port a game to China for a quick hit.
 
Allan Simonsen, who's based in Singapore, says that "Southeast Asia is the bastard lovechild of the West and the East." As consumers, Singapore has the same consoles as Japan and the West. Meanwhile, developers have come to the country trying to escape the $10,000 man-month – from EA to LucasFilm to Koei.
 
"And you see bias towards an asset production pipeline," says Simonsen, who describes a "massive hiring frenzy," where companies want to hire but find there aren't enough people to employ.
 
Mi says that China has no shortage of talent, and he describes too many universities, with too many smart people, but says it's impossible to find anyone with experience.  "Then it relies really heavily on the management team that you have."
 
"Where we struggle is that we lack depth to the talent pool," says Wynands, noting that most talented people "are already working within a New Zealand developer".  In order to find senior developers, "We have to attract those people from overseas. And that can be a very long process."
 
Ueda says that the domestic market is large enough in Japan that publishers don't have to look at a global market. Consequently, that means that Japanese developers cannot follow the global trends. "Quality of Japanese games are way behind, compared to MMOGs from other countries," Ueda continues through his translator, noting that, when it comes to local MMOs, "The main players are not huge publishers – the market is led by independent publishers."
 
Mi reports that government support for gaming in china is rather limited these days.  They see games as a booming, growing category, but don't understand the content, so they regulate it.
 
"They're trying to protect what they don't know. It's kind of an instinctive reaction from the government," Mi explains. "The moment they let something go, they might not be able to get it back." China recognizes the huge opportunity, but is moving cautiously.
 
Ueda responds that in the case of Japan, there's very limited government support.  Most companies are funded by venture money, and "These days, game development is costing a lot." Which means that developers there are hurting. "We think there should be some financial support in the near future."
 
One of the outstanding features of the Japanese online market is the average revenue per user is very high says Ueda – 4,600 Yen, slightly more than $40 USD.
 
Mi says that in China, the average revenue per user is $12 per player, "but we're looking at 140 million gamers."
 
Wynands says that online subscription games are rising in New Zealand, but consumers still don't appreciate buying the game in a box, then paying a monthly fee to keep using it. "We still have that sensibility of being offended by having to pay extra."
 
Ueda says that development itself is different in Japan. Loyalty to a company is very high in general, and game developers have a certain professionalism. He gives the example of a graphic artist who might expect to do game backgrounds for five years.
 
This has its own problems, Ueda points out. "That means that younger programmers are having a hard time to get promoted – so it's hard to keep their motivation."
 
Kojima, and Miaymoto are getting older, but as Ueda points out, "we don't see younger programmers getting famous."
 
Ueda then talks about the cost per man month. He says it's reasonable at successful companies – but at second-tier developers, "the wages for those developers is miserably low."
 
Over in China, salaries are low. "But it won't last for long," reports Mi. He explains that foreign companies come over to China, and want to attract the best talent. They raise the prices they'll pay workers, because they can afford it. "In a way, they harm the market, because they increase the expectations." Mi concludes that the prices for Chinese talent will rise, marginalizing the current disparity in development costs.

Story filed by N. Evan Van Zelfden in Singapore