2017 year in review

Going to try to talk about the 3 most interesting themes I felt, reflecting on the past year. As always, these themes take a heavy China perspective.

The rise of PUBG and the even bigger rise of mobile PUBG-likes

Globally in gaming, PUBG was the biggest breakout success of 2017, coming out of left-field (what are chances of a modder partnering with a Korean studio to successfully launch a global title?), and achieving impossible heights. If you said at the beginning of a year that a Korean PC game would break 3M PCU on Steam (and easily dethrone Dota2 as king of that platform), everyone (and especially all the industry insiders / experts) would have laughed. And yet this is exactly the appeal of the industry – what seems like ludicrous ideas can completely transform the landscape in a brief amount of time.

I wrote about what I thought made PUBG such an appealing experience; the follow-up to this success story is even more noteworthy though. In the brief span of a couple of months, a horde of Chinese mobile PUBG-likes were launched, and a couple of them, Rules of Survival and Knives Out (both from Netease) also hastily released global versions. These games have performed surprisingly strongly in key markets globally – Knives Out has over 100M registered users and 20M DAU (majority of which is from China, of course), while Rules of Survival has some 50+M registered users (and performed better than Knives Out in the US).

If you had a chance to try any of these games, you will see that they defy all common (western) notions of what a mobile game is. They are janky and hardcore, and are almost literal ports of the PC PUBG experience. It’s easy and (to a large extent, fair) to deride/dismiss these games as copy-cats; but that doesn’t answer the question of why they are so successful (e.g. who’s playing these games? Lots of people across a far broader demographic than PC gamers, it turns out), and what PUBG should do.¹

Chinese mobile games’ huge production quality upgrade

The production quality upgrade of top Chinese mobile games is something that has been a steady evolution, but it has hit me in the head recently just how big the improvement has been, even compared to a couple of years ago.

Some notable games that illustrate this:

• Netease’s Onmyoji, launched at the end of 2016 and which is currently in closed beta for North America, is a game that screams “look at my shiny anime art style and impressive VO featuring top Japanese voice talents!”
• Honor of Kings’ (Arena of Valor in the west) 60fps update, which launched in January 2017, completely changed the game’s experience. It’s as impressive a visual update as, say, Apple’s rollout of Retina displays IMO
• Honkai Impact 3: anime-style ARPG, from a Shanghai-based studio

What these games represent is the coming of age of Chinese studios: these teams have mature dev and art pipelines, and have established processes that support large scale development on mobile. By large scale, I mean 200+ headcount projects (such as the Tencent mobile PUBG games in development), which I dare say I can’t think of one western dev at this scale on mobile.

And furthermore – these large teams all have launched numerous projects, so they have gone through trial by fire. So I think Chinese studios have a firm lead here just by virtue of accumulated experience.

The success of the Switch and what it means for mobile

In more general gaming, the Nintendo Switch also heavily outperformed versus expectations, largely driven by strong first-party titles such as The Legend of Zelda: Breath of the Wild.

What I personally found amusing, was the player raves around the mobile benefits of the Switch – e.g. Mario Kart parties during lunch-break at the office. Not to take anything away from Nintendo building a great experience – but this is exactly the type of thing that Chinese gamers have enjoyed for years on mobile, with core multiplayer games such as Honor of Kings.

If you were to compare the Switch with an iPhone (or top of the line Android), the only real advantages (from developers’ perspective) the Switch enjoys are 1) physical controller 2) Nintendo first-party games 3) premium pricing for games which players have accepted. For 2 & 3, it’s hard to see that change given app store dynamics and Nintendo’s interests, but 1) is an area where I could see some material changes.

I know in some ways this sounds backwards, but I believe firmly that controller peripherals offer a major opportunity to elevate core gaming on mobile. This is a classic multi-sided chicken & egg problem: without strong adoption of controllers, games have little interest to support/demand them; without great games, controllers can’t sell. I wouldn’t be surprised to see some shift arising from China – there are already some interesting controller plays at small scale, such as this brand of controllers with dedicated software optimizations for playing Honor of Kings / Rules of Survival.²