Several years ago I wrote about how China’s Android app stores ecosystem took a different path after Google’s exit. It’s time to briefly revisit this topic, thanks to some recent news.
The first news is related to Dungeon & Fighter Mobile’s China release. It’s been widely reported that the game generated $270M of iOS gross revenue in its first month, and Chinese media have further guessed a staggering RMB 5B ($690M) first month combined gross across iOS and Android.1 With this massive launch as the backdrop, Tencent then decided to pull the game from certain Android app stores – players will instead have to download from other stores, or directly from the game’s official website (i.e. sideloading, the behavior Epic had wanted people to adopt for Fortnite).
We can speculate the rationale behind this move. It’s probably a combination of the following factors:
- The game is primarily targeting legacy Dungeon & Fighter PC players, who are tolerant to jump through hoops to play the game – in other words, there is little to be lost from reducing the distribution footprint;
- The launch metrics emboldened Tencent to push for higher margins, even at the expense of new user acquisition.2
This is not the first game to get more selective with Android app stores in China. The fragmented landscape and the various tricks/schemes played have always incentivized developers to have a mercurial or even hostile attitude towards the store vendors. But combined with the next piece of news, I wouldn’t be surprised to see developer – store relationships further splinter.
The second news is about Huawei’s HarmonyOS(which started off as an Android AOSP fork), and specifically, the next major version HarmonyOS NEXT scheduled for Q4 2024, which will officially drop Android compatibility. This is a fascinating development. Most people (myself included) would say the mobile OS wars have long been over – and both iOS and Android won – so it’s intellectually exciting to see a dramatic new entrant.
Huawei has a big uphill battle, but it certainly has some advantages as well, and the current Android-compatible HarmonyOS has established a foothold already – Counterpoint Research estimates it has 17% OS share in China, slightly ahead of iOS (16%), with the remaining majority being Android. Now of course, dropping Android compatibility is still a huge gamble, but at least Huawei can present a somewhat legitimate sales pitch to developers given its market share.3 So far, Tencent has been a notable holdout, and apparently there are negotiations ongoing about porting WeChat (but I’d assume also the tentpole/cash-cow games).
- Using a rule of thumb 60/40 Android/iOS split – not accurate, but not a bad ball-park guess. ↩
- As an aside, I’m a bit surprised at some of the analysts’ bullishness on the title. The first month figure is certainly staggering – even by China market standards – but the title is a unique snowflake (given its years-long regulatory limbo) with lots of pent-up demand. Its performance in Korea (a big sharkfin graph) is certainly not inspiring from a longevity perspective. ↩
- just look at this amusing headline today from TechRadar – “Huawei succeeds where Microsoft failed miserably — HarmonyOS now on almost one billion devices, and China’s largest mobile phone manufacturer has completely eliminated Android”. ↩