'Candy Crush Saga' Will Have To Work Hard To Crush It In China's Competitive Mobile Gaming Sector

  @SophieXSong on April 16 2014 5:02 PM
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Traders watch as a mascot dressed as a character from "Candy Crush Saga" walks the floor of the New York Stock Exchange, March 26, 2014. REUTERS/Brendan McDermid

"Candy Crush Saga" is going to get a second crack at China when it’s offered this summer to the 225 million users on the country's biggest mobile gaming platform, but it will have to work much harder to achieve the level of success it’s enjoyed in the U.S.

Chinese Internet giant Tencent Holdings Ltd. (HKG:0700) and the game’s maker, King Digital Entertainment PLC (NYSE:KING), on Monday unveiled a partnership to release a version tailored to the more fickle Chinese gamer, but the high-profile partnership won’t guarantee success, experts say.

“Chinese users are impatient,” Wang Yang, president of FL Mobile, China’s top iOS game publisher, said at last month’s Game Developers Conference in California.  

He cautioned that first-time user experience is paramount in China, where copycat games quickly emerge and pirated versions appear on third-party stores immediately.  

“Casual games are hot, but don’t monetize well,” Yang said, referring to games like "Candy Crush" that have simple rules and target mass audiences.

The partnership was unveiled at the UP2014 Tencent Interactive Entertainment Annual Press Conference in Beijing. The game will be available this summer via Tencent’s WeChat platform, China’s most popular mobile messaging system, which boasts 225 million active users. The partnership hopes the game will be as popular as the U.S. version, which has been installed on more than 500 million Apple iOS devices to date.

History dictates that copycat versions of the game have probably been available in China for a while, since the game’s official Western version has been available on China’s Apple App Store for some time, where it's had limited success compared with its huge home market fan base. The American version has managed to become only the 65th-highest grossing game in China, according to data from research firm App Annie.

But King has reason to hope "Candy Crush’s" Tencent debut will be different. WeChat is also China’s biggest mobile game distribution channel. Its huge user base and highly selective screening process for offering games limits the options for online players, and those that make it onto the channel have a good history.

China’s mobile gaming market has performed quite well despite finicky players. The sector is expected to more than double its revenue to $27 billion this year from $11 billion in 2013.

If "Candy Crush" can grab a decent piece of that growth, it could be just what the company needs to ease management and investment pain from a rough few months. In March, King’s initial public offering suffered the worst first-day trading of any IPO this year, according to the Wall Street Journal. Its shares fell as much as 16 percent on its first trading day.

By midday Wednesday, just hours after news of the Tencent partnership broke, King’s shares rose 3.3 percent, to $18.01.

As China’s biggest listed Internet company and the parent of QQ, the country's most popular online messaging system, Tencent could also benefit from the partnership as it expands beyond WeChat’s core messaging business with additional functions like games and financial services.

Tencent, which last month bought Korean mobile game firm CJ Games for $500 million, unveiled five other new WeChat-hosted games on Wednesday, including Japanese card game Three Kingdom Dance, from developer Square Enix, and two games that Tencent developed in-house.

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