Adapting measures to local conditions and working together for a win-win situation | Insights from game publishers in the Asia-Pacific region

For game practitioners, the game distribution model is not a new concept. However, mobile game publishers have become increasingly important due to changing and complex policies, increasing user expectations for localized content, and increasingly disrupted external environments (such as the decline in travel due to the epidemic).

In some markets, partnering with a publisher may be the only option for foreign developers to enter the market. Therefore, publishers who can help developers navigate the local market are an integral part of the mobile ecosystem. We surveyed and interviewed publishers in Asia Pacific and developers working with third-party publishers to better understand and build successful partnerships.

Here's our elaboration of some definitions:

• First-party distribution refers to games released by the developers themselves.
• Second-party distribution refers to publishers working closely with developers through joint ventures.
• Third-party publishing refers to developers developing games and entrusting independent publishing companies to publish games.

In this article, we will focus on introducing you the experience and insights of game publishers, and later, we will also share the views of developers on third-party publishing, so stay tuned.

First, let's take a look at the basics of how game publishers work.

For the 28 publishers surveyed across the Asia-Pacific region, their top priority and biggest challenge was identifying quality games to license and publish.

When publishers look for games, they typically reach out to developers directly from existing sources or through various gaming campaigns, and choose games based on market fit, gameplay, and game metrics. Since the outbreak, this process has slowed down. Once a publisher has identified a game they are interested in, a licensing agreement is usually signed for a two- to three-year period. The agreement typically provides for revenue sharing, a minimum revenue guarantee (the publisher must pay the developer a fee regardless of the actual revenue generated), and an up-front annual licensing fee.

In terms of partnerships, most publishers rely on developers to support technical optimization or troubleshooting. Some publishers are willing to form strategic partnerships with developers, such as providing game design guidelines or even establishing joint ventures to continue collaborative projects in the future.

Below is a summary of our interviews with publishers in the Asia Pacific region, including Gamania (Taiwan), VNG Games (Vietnam), IndoFun Games (Indonesia), Neocraft (China) and Kakao Games (South Korea).

• A common misconception is that publishers are only looking for short-term benefits. While some publishers do employ this strategy, there are also future-focused publishers interested in building long-term, sustainable partnerships. That means the game will remain in operation for three to five years or more, and will expand to other markets or collaborate on new projects. It's in the publisher's best interest to maintain close relationships with trusted developers so they can prioritize promising new games in development.
• Publishers tend to focus on specific genres and markets. Developers can decide on suitable partners based on this information, and developers can also refer to the publisher's track record to make appropriate choices.
• Developers often choose to self-publish games in their experienced markets and work with publishers in other, less familiar markets. For larger games, developers can even choose to work with different publishers in each market. In this case, developers must align with publishers in different markets in order to maintain a fair and consistent pricing and marketing strategy for gamers.
• The greatest value that publishers bring is their well-established local partner resources. This includes their relationships and understanding with local KOLs, media agencies, IP holders, localization agencies, customer service agencies, and the community. Having a local partner can be very helpful, especially in certain areas still affected by the outbreak.
• Publishers offer more than language translation and customer service. They can also advise on local user behavior research, potential market size, marketing optimization, mobile or internet specification testing, and monetization advice such as pricing. This allows developers to focus on their core strengths, such as optimizing product stability and content.
• Publishers often have a good understanding of industry standard metrics and local gamers' preferences for specific markets. This enables them to adapt LiveOps campaigns as needed, create meaningful community interactions, and advise on gameplay and creative designs to gain more users. Specialization is an efficient way for developers to scale quickly with low risk.
• As with any successful partnership, both parties need to communicate often and candidly and provide feedback based on facts and figures. Breaking into new markets is not simply copying what is done elsewhere. It requires creatives to conduct multiple beta tests, focus groups, A/B tests, etc., to ensure that content and gameplay are well-designed for local gamers.
• In the past, hardcore games such as MMORPGs and SLGs were often the preferred genre for publishers. However, as the industry grows and gamers have more diverse tastes, the market is opening up to more genres. This means that publishers no longer only choose games with strong IPs or from large studios, but now they also take licenses from small and medium developers who build mid-range and casual games.

As we look to future trends in the industry, distribution companies may offer modular services, such as community management, customer service or marketing, rather than just a full suite of third-party distribution services.

Due to the pandemic, remote distribution may be the only solution for developers without a local office. However, this will become increasingly difficult as gamers become more sophisticated and local policies continue to change. Developers are unlikely to be experts in every core market unless they have reached a certain size. As such, local publishers are important partners for developers to consider, especially in the early stages of a global launch or when there is no energy to closely monitor and optimize certain markets.

Stay tuned for follow-up articles as we review research and interview results from a developer's perspective and share a best-practice checklist to help you better identify high-quality games and partners to keep your game running smoothly release, and reduce potential problems.

You are welcome to pay attention to the Google Game Developer Summit or watch the detailed Chinese video on the "Android Developer" video account. We have selected the key updates of Android and Google Play in this summit for game developers, as well as the latest updates on various tools and services. Dynamic, help you create a high-quality gaming experience, and help your gaming business develop steadily.