On June 11, Perfect World and Valve announced a strategic partnership to launch Steam’s game platform in China. The news immediately caused a stir among Chinese game players. Even CCTV, People’s Daily and other mainstream media published suggestions for Steam’s entry into China. So, will Steam’s China journey be smooth sailing?
Three secrets have helped Steam become the world’s largest digital distribution platform
Steam is one of the largest integrated digital distribution platforms in the world. It won the 33rd Golden Stick Award for Best Game Platform.
Steam was founded in 2003 as a game downloader, and by the end of 2017 Steam had more than 300 million registered users. There are three reasons why Steam has grown from a dropout, a delivery boy, and a dentist into the world’s largest comprehensive digital distribution platform:
First, bundle with proprietary, highly rated games. In the early days of Steam, no third party company was willing to work with Steam. At that time, Steam took advantage of the reputation of its games such as Half-Life, CS, etc., and bundled them together, requiring players to sign up for a Steam account in order to play its games. Since Valve’s games are of good quality, players are willing to buy Valve’s games through their Steam accounts, which greatly promotes the Steam platform and makes it widely known and accepted by everyone.
Second, platforms focus on the player experience. Users are at the heart of any business, and they will only continue to use the platform if the user experience is good. At that time, pirated games and plug-ins ran rampant, greatly affecting the game experience of ordinary users, so Steam platform specially developed VAC anti-cheating system. The successful use of VAC system greatly cracked down on the atmosphere of cheating in the game and purified the game environment.
In addition to the anti-cheating aspect of the game, Steam also offers holiday blessings and discounts according to the actual situation of players in different regions. For example, Steam specially adds Spring Festival elements to its website during the Chinese Spring Festival and gives discounts to games in China. All these make players feel the heart and care of Steam platform.
Finally, an open platform brings a wealth of gaming resources. As of December 2017, there were more than 20,000 games available on Steam, and it’s also the platform that releases the most outstanding games, including 2017’s top grossing GAME PUBG Battle Royale, shooting game CS Global Offensive, action simulation game GTA5, and more.
Why do so many manufacturers and game developers choose Steam? The reason is simple: Steam was the first open platform for games, and it was very popular with both the average developer and the big game maker. The life cycle of any game is limited, and once the user loses interest in the game, the dependence on the platform is greatly reduced, but if the platform has a large number of games, the effect of increasing the dependence on the platform is huge.
China is the world’s leading game market, and Steam has joined forces with Perfect World to explore China
With China’s growing influence in the world, it is hard to avoid China in any field, and the same is true of the gaming market. The PC gaming market in China is maturing. According to the 2017 Global Gaming Market Report released by Newzoo, a Dutch market research firm, there are 1.1 billion paying players worldwide, and China holds the no. 1 position in global gaming revenue with 27.48 percent. The vast Chinese game market has become a big pie that everyone is eager to share. What are the opportunities for Steam to enter the Chinese market in cooperation with Perfect World?
First, the Chinese game market is highly exploitable. On the one hand, Chinese players account for 11.56% of Steam registered users, ranking second among Steam registered users worldwide. The number of Chinese users is huge. If Steam and Perfect World launch a Chinese version of Steam, the number of Chinese users will be far more than the current 35 million under the combined IP of Perfect World and Steam. On the other hand, there is a lack of high-quality AAA game titles in the Chinese market, and Chinese users expect more international AAA game titles to enter the Chinese market. However, Steam platform has a large number of AAA game titles, which meet the expectations of Chinese players and has a large number of potential users.
Second, Chinese gamers’ concept of gaming is changing, and people’s willingness to spend on paid games has become the new normal in the industry. With the deepening of China’s modernization drive and the great improvement of people’s living standards, it has brought about the upgrading of consumption structure and the transformation of consumption thoughts. From playing pirated games to supporting legitimate ones, the public has gradually begun to accept and consume paid games. The shift in Chinese gaming consumption is a once-in-a-lifetime opportunity for Steam, where 90% of its games are paid.
Third, partner perfect world has an increasing influence on Chinese games. Perfect World ranked 24th in the 2017 World Gaming Company Rankings (according to Newzoo), and 3rd out of 4 companies in China. Perfect World represents international masterpieces such as “DOTA2” and “CS:GO”, which are popular in 2017. These works have performed well in the Chinese game market, among which “DOTA2” ranked fifth in the 2017 game market revenue scale data report released by SuperData, an American data website. Steam’s partnership with Perfect World will leverage Perfect World’s influence in the Chinese game industry to quickly localize the game.
Fourth, there is currently little competition in the Chinese PC premium game market. The game in The Chinese market is mainly based on the prop charging model. The game manufacturers using the prop charging model include Tencent, netease, Perfect World, Xishan House and so on. China’s PC paid game market is basically undeveloped, and there are very few games or platforms involved in paid games. The main competitor of Steam in China is Tencent’s WeGame platform. However, as WeGame platform has just been launched, there is a serious shortage of high-quality game resources, and its reputation is worse than Steam platform. As such, Steam has little competition in the Chinese PC premium game market.
Five big obstacles stand in the way of Steam’s China tour
China is a very magical market, which not only gave birth to Tencent, Baidu and Alibaba; International giants such as Google and M&S were forced to withdraw from the Chinese market. Now Steam is entering the Chinese market with local game company Perfect World, and there are five obstacles.
First, Steam faces competition from Tencent’s WeGame gaming platform. Tencent, the world’s largest gaming company, also launched its WeGame platform in April last year, making it the biggest competitor to Steam. Although WeGame is currently inferior to Steam in terms of game quantity and game quality, Tencent has many advantages, such as sufficient capital, localization advantage, huge user base, strong pr team, high product convenience, and perfect game ecosystem. In addition, Tencent has invested in international game companies such as Ubisoft and Blizzard, which have prioritized WeGame over Steam to launch their games in China.
Second, it is difficult for Steam games to fully penetrate the Chinese market. Due to the openness of Steam platform, many AAA game titles have violent profits and bloody reactionary elements, and the Chinese game market is becoming more and more stringent. If the game is completely entered into the Chinese market, it will face a series of problems, such as difficulty in launching and examination. Steam will inevitably require changes or cuts to the game, which will ruin the experience. Whether the game can fully enter the Chinese game market is the first big problem facing Steam platform.
Third, Steam platform network optimization issues. Optimization of the game network is a trilemma for Steam. One difficulty is that many online games have high latency due to the lack of servers in China, forcing players to buy online acceleration software or services, which will force some players to abandon Steam and switch to other game platforms. The second difficulty is that it wouldn’t work if Steam used Perfect World’s servers to solve the problem of network instability, since Perfect World’s own servers often go down, let alone bring Steam into China. The trilemma is to set up a new server, but the new server is not a short time to do, and then missed the best opportunity to enter the Chinese market.
Finally, the perfect World games platform is not operational. Although the perfect world has many years of experience in developing games, it also has experience in acting for foreign high-quality games, and the agency effect is good. However, Perfect World mainly operates games rather than platforms, and has too little experience in operating game platforms to successfully operate a large international game platform like Steam. In addition, the operation ability of perfect World’s publicity team and public relations team is also questionable. Compared with rival WeGeam platform, which has QQ, wechat and many entertainment products, perfect World only has third-party entertainment channels to go through, so the publicity channels are relatively closed. All this makes it more difficult for Steam to operate in China.
In addition, some Chinese gamers have issues with Steam. Some players are worried that Steam will delete and change the game in China in order to enter the Chinese market, but the game they buy after spending money is still the deleted version, which seriously affects players’ experience of the game. Therefore, some players are opposed to Steam entering China and may switch to the WeGame platform. This is no small matter for a newcomer to Steam.
All in all, the launch of Steam in China is good news for Chinese gamers. It not only enables Chinese gamers to have access to more excellent international games, but also has positive implications for the Chinese game industry as a whole. It not only helps to strengthen the competition in China’s game industry, thus promoting the transformation and upgrading of China’s game industry, but also provides a platform for Chinese game creators to “go out”. Although Steam’s journey to China has faced problems with Tencent’s WeGame platform and other issues, the strong rise of the Chinese game market is still the biggest opportunity for Steam in China.
Whether Or not Steam can succeed in China and continue its legacy remains to be seen.
Article/Liu Kuang public account, ID: Liukuang110