China's casual video game market offers opportunities

News that Tencent, the owners of WeChat, this month struck a new deal with French "casual video game" developer Voodoo is a big one for the industry.

So-called casual games are designed to be played on smartphones, on train commutes, idly on your sofa or on lunch breaks, have made up a huge market share of the most valuable digital media content industry on earth.

WeChat, with its various built in features and services, dominates the most lucrative smartphone market in the world right now.

These types of mini-games are accessible, cheap while often being free. They also have a wide appeal to demographics that would not traditionally be associated with hardcore gaming. This new deal is poised to exploit the rapid development of this market in China.

The French developers already boast more than 300 million monthly active users and have been active since 2013. In the world of mobile gaming, this makes Voodoo a wise old man.

Business models for so-called "hyper casual" games mostly rely on advertising revenue, and have a fast turnover. Games synonymous with this kind of genre quickly reach a viral craze before burning out and being replaced by a new novelty.

This ad driven revenue model is one that Voodoo is well versed with, and of interest to Tencent due to the Chinese regulatory landscape.

In-game purchases are heavily regulated by the authorities to prevent issues such as gambling addiction and high profile cases of children clearing out their parents' bank accounts unwittingly through ingame perks. Ad driven revenue therefore has less regulatory loopholes, and will enjoy a smoother route to market.

Games successful in the early part of the previous decade such as Temple Run, Flappy Birds and Candy Crush all quickly became household names in the West, while in China more recent shootem-up survival games such as PlayerUnknown's Battlegrounds, better known as PUGB, and fantasy games have dominated the charts.

Such games have received such a cult obsession, that following the discontinuation of the game Flappy Birds from the Apple app store, iPhone 5s with the game downloaded were on sale on the second-hand market for as much as $90,000 in the United States.

The iron is red hot given the current global economic climate. Due to the pandemic, and stay at home restrictions, more people are spending time on video games the world over.

China especially is the world's largest smartphone and video game market, and with the specialist knowledge at Voodoo, it is expected that Tencent will be able to expand on the already diverse range of mini-game options available in the WeChat app.

Voodoo chief executive, Alexandre Yazdi, stated on Twitter: "We look forward to developing new products together for the Asian market, and publishing games created by the many talented games studios in the region."

The attractiveness of the deal is one that can offer scope for growth for Voodoo too, something hard to come by when the company has already achieved 1.1 billion downloads. A collaboration into Asia therefore seems only fitting.

Voodoo's specialist knowledge of casual games is held in high regard within the Chinese industry. Complex games with gore and violence often struggle with regulatory hurdles as well as mainstream adoption domestically. Tencent, already a video game veteran in their own right, now has the capacity to tap into the casual gamer market, a market which in China still has much scope for growth.

Barry He London-based columnist for China Daily