China Issues IP Infringement Rules

Tencent Surges in Q3

Tencent had its highest profit in Q3 2015 thanks to messaging services, video and digital games. Games via PCs and mobile devices both helped boost net income to $1.2 billion for the 3-month period. While costs are rising, that is still impressive net income to say the least. There were 650 million monthly active WeChat customers at the end of the quarters. Also, Tencent shares have surged 35% this year whereas top competitor Alibaba’s shares have fallen 22%.

TV-Based Gaming in China

This story reinforces the trend of TV-based gaming that Niko Partners highlighted in our June 2015 report on that topic. Tencent announced the “miniStation”, the company’s new mini-console. Any manufacturer who works with Tencent can design its own version of miniStation, which runs on Android-based Tencent OS. Players install an app (iOS or Android) and use their smartphones as controllers, to operate the games played though TVs. The app also enables social gaming via WeChat and QQ. The miniStation even has its own controller, so if playing together one person can use his phone and the other person can use the controller. Tencent announced Skyworth and Lenovo are among the hardware partners, and announced several games including Naruto, Modern Combat 5, Asphalt 8: Airport, n.o.v.a3, Implosion, FIFA, We MOBA, and Infinity Blade.

Take-Two Closes Shanghai Office

Take-Two Interactive announced the closure of the 2K office in Shanghai, citing the cancellation of Borderlands Online as the primary reason for the closure and lay off of the 150 employees there. Take-Two still has a team in Shanghai working on NBA 2K OL and a testing studio in Chengdu, along with the company’s Singapore regional office.

Steam Employs Local Parity Pricing in Emerging Markets

Steam officially launched its China store, using Chinese RMB and supporting Alipay and UnionPay cards. The company is using local parity pricing, enabling the price of games to be lower in China than they are in the U.S. Steam also employs local parity pricing in Southeast Asia and other emerging markets, and it is a productive strategy that other companies also use. For example, Fallout 4 is sold at $59.99 in the US but only RMB 199 ($31) in China. GTA 5 is sold at $59.99 in the US but only RMB 189 ($30) in China.

China Issues IP Infringement Rules

Marbridge Daily reported on China issuing draft policies to combat e-Commerce counterfeit sales and online intellectual property rights infringement. The General Office of China’s State Council stated it will crack down on counterfeit products sold over the Internet by strengthening and enforcing laws and regulations. It will also tackle counterfeiting of famous trademarks and foreign brands. It will monitor Internet literature, music, movies, TV shows, animation, software and other copyrighted products and combat infringement. The government will rely on the national copyright monitoring platform to track app stores, cloud storage, weibo, WeChat, and other platforms.

Internet Cafes Restricted in Vietnam

The Vietnamese government announced that all Internet cafés and places of online access in Ho Chi Minh City are restricted to operations between 8am and 10pm, effective September 24th. Niko’s newest report, Southeast Asian Digital Games Market 2015 (with forecast through 2019), includes the vibrant and growing market of Vietnam.

Niko Partners on Twitter

Follow us on Twitter @nikochina to see these comments in real time as we publish them! Here are a few of our tweets from last week:

  • China doubles down on Hollywood http://www.ejinsight.com/20151110-china-doubles-down-hollywood/ …
  • China Cracks Down On Internet Music Services http://on.tcrn.ch/l/Zyqu
  • Great advice. Want to Protect Your IP from China? Throw Your NDA in the Waste Basket http://trov.es/1MT5c3Z
  • What Is Tencent? http://on.wsj.com/1kkofaY
  • Steam Supports Chinese RMB http://nikopartners.com/steam-supports-chinese-rmb/ …
  • The latest Chinese digital games industry backdoor A Shares listing: New Century Cruise acquires 100% of Giant. http://bit.ly/1MCrRkU
  • Shanda gross revenue for the 1st half of 2015 down by 26.1% and net profit down by 52.2% year over year: http://www.gamelook.com.cn/2015/10/231843
  • China drops one-child policy for all couples. Recently the ban had been only part lifted. http://news.sina.com.cn/c/nd/2015-10-29/doc-ifxkhcfq0963784.shtml …
  • Alibaba’s shares are red hot these days: http://www.businessinsider.com/alibaba-q2-earnings-and-share-price-2015-10 …
  • Century Huatong (002602), finalized 43% purchase of Shanda for 6.4B RMB & 100% of CMGE for 7B RMB. Looks like back-door listing in China.
  • 2015-11-16T07:30:39+00:00 November 16th, 2015|Categories: China, Internet Cafes, Southeast Asia, Tencent, Vietnam|

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