EPTIt's ChinaJoy opening day today, the equivalent of E3 in China. Big companies, new titles and booth babies, even Fomos loves it. Instead of displaying console games, ChinaJoy is mainly for online games because we have nothing but online games. Most old developers of PC games died one by one since late 1990s due to piracy. Few are left, switching into online games. As for console games, oh, let me tell you something: I have an Xbox360 that is only available in the grey market and a shit load of pirated game discs, each costs less than $1.
Anyone who wants to make money from the gaming business in China, it must be a damn online game.
Blizzard has had three partners in China. The first one is Aomei Soft, who published StarCraft, Diablo II and Warcraft III for Blizzard. Aomei Soft was once the gaming unit of Charoen Pokphand Group (the biggest conglomerate in Thailand), later acquired by a Chinese telecommunication enterprise. Aomei sued Holdfast (Haofang, I think many of you got to know this Chinese version of Garena thanks to Possible reason Blizzard dropped LAN support thread) for providing illegal LAN based platform of Blizzard games in 2006 and asked for million of dollars compensation. Shamefully, they lost the case because the court said they did not have hard evidence.
Why is Holdfast that arrogant? The biggest shareholder of Holdfast is also the biggest game company in China – Shanda. Shanda monetized Holdfast after acquiring it in 2004, adding paid features and subscriptions. With less than $2 subscription per month, you can join any channel even it’s full, you can kick out some noob you don't like. Other paid features include 50% exp. point bonus if you win or no exp. point cut if you lose. (Think about if iCCup provides something similar….) It's not compulsory but lots of players are willing to pay since it's "small money“. (It is also the reason why micro-transaction based Free-to-Play MMOs are so popular in China.) Chinese Starcraft/Warcraft gamers pay no penny to Blizzard but pay some money to Holdfast, which obviously makes Blizzard crazy.
Platforms like Holdfast can be a possible reason Blizzard dropped LAN for Starcraft II. Business is business. The new Battlet.Net will absolutely have paid feature/subscription, I'm not saying the global one, I'm talking about the upcoming isolated Chinese Battle.Net. See, even Battle.Net can be communistic. With LAN or without LAN, Starcraft II won't be a million-copy-seller game in China. It's hardcore, it's for people of my age (played Starcraft many years ago, now have a job, can afford a legal copy). "Why not just stop those Holdfast guys stealing our money?" Simple logic of Blizzard.
The second partner was The9, the former local operator of WoW in mainland China. With an idiot boss who generated money from WoW then bought a soccer team for fun (Chinese soccer team FAIL). He's even more stupid to have a good friend at EA to get EA's investment and FIFA Online in 2007. Blizzard kicked it out early this year and turned to NetEase.
The third partner NetEase already signed Starcraft II and the new Battle.Net last year. Blizzard chose it because 1) NetEase is willing to pay more royalty 2) NetEase's boss is a member of the national congress. Government relation is important for business everywhere, but especially important in China. If the government don't like you, they can find the most absurd reason you can imagine to kick you out. Last year when Blizzard tried to register Starcraft: Ghost at the Chinese patent bureau. It was rejected because "Starcraft indicates astrology and Ghost is definitely evil." Yeah, we are communists we are 100% materialistic don't try to infect us with your capitalistic evil things.
There is no rating system for any entertainment industry in China. Movies? Video games? No. There are only two types: green/harmony and dirty/disharmony. You talked about Tian'anmen Square riot, you are disharmony; you want democracy, you are disharmony; you watch porn, you are disharmony; you play violent video games, you are disharmony. So don't be surprised that skeletons were put on flesh in Chinese version of WoW. Ridiculous things happen every day here. Some are not too bad, just hilarious; some make people enraged.
What's worse is two national bureaus have been fighting for the administration right of video games, General Administration of Publication and Press and Ministry of Culture. Both claimed they are authorized to censor video games before the publication/open beta testing. (By censorship, here it means 2 or 3 grandpas from the bureau who had probably never played any video game in their entire lives, access the game server with GM accounts, to see if there are naked women or bloody bodies.) Once Ministry of Culture agreed to support GDC China (by Think Group), GAPP immediately turned to support another industry panel called China GDC. Games and game companies are obviously the victims of their fight. Sadly, Blizzard and NetEase probably didn't offer enough bribe to the governors from both bureaus.
Blizzard sure have lots of talents who can make some best video games. But they don't have talents to deal with communists. Don't forget – North Koreans, they are our brothers. The future of WoW, Starcraft 2, Diablo 3 and whatever new titles in China, is doomed. I promise you this won't be the last ridiculous story you hear from China/Blizzard/Starcraft/WoW. There is gonna be many, many to come.
PS, some personal comment:
From the business perspective, China market is not essential to Blizzard. What? Five million Chinese World of Warcraft players, who are almost half of total subscribers, are not important? Do some simple math, WoW contributed 39% of Activision Blizzard total revenues according its Q1 fiscal results. If we take a look at the geographic breakdown, Asia Pacific contributed only 7% of total revenues (Asia revenues = WoW revenues). Let's say Korean and Taiwanese (two major independent servers in Asia other than Chinese) count 2%, China is the rest 5%. That comes to a conclusion – half of WoW subscribers only contributed 12.8% of WoW revenues. Michael Morhaime can just say "f*** you" to China government, and leave.
