The mobile games market in China is highly consolidated, with the top 20 grossing games generating over 60% of total revenue and dominated by 10 publishers. Production and marketing costs for games are high, ranging from $5-10 million to develop a game over 12 months. Only 20 independent games made the top 50 grossing games in 2015 compared to 39 in 2014. Opportunities remain for independent studios to build their own intellectual property or partner with publishers who can help expand the studio's IP to new markets and platforms. Studios need to focus on their core expertise, prove their metrics and games' potential, and build realistic financial models to align expectations with potential publishing partners.

1. Amy Huang
NetEase Capital
Finding the Right
Partner and Managing
Expectations

2. Consolidation
- Top 20 grossing games dominated by 10 publishers*
- ~340M USD generated by top 20 games in June 2016 (~60% of total
iOS market)
- Monthly revenue ranges from 60M US to 7M US /game
- NetEase and Tencent taking away over 70% of the top 20 revenue
- Genres dominated by 50% MMORPG or MMOARPG games, 25% card
battle games
Sky high production and marketing costs
- $5-10M production cost /game, developed under 12 months
- Big IP attached, from PC games, Japanese anime, or TV series
- Huge marketing budget
Current market in China
*June 2016 China iOS Appstore data

3. 0
1
2
3
4
5
6
7
8
9
1-2M 2-2.5M 2.5-3M 3-5M >5M
Others
MOBA
MMORPG
ARPG
SLG
Card battle
Monthly Gross
Revenue (M US$)
9
3
4
3
1
Only 20 independent games
made into top 50 grossing in 2015

4. Compared to 39 games
by independents in 2014
0
2
4
6
8
10
12
14
16
18
20
1-1.5M 1.5-3M 3-5M 8M* 30M**
City builder
FPS
Autoplay
MMORPG
ARPG
Casual
Card battle
18
11
8
1 1
Monthly Gross
Revenue (M US$)

5. 7 games
1 game
1 game
• Clash of Clans (SC)
• Hearthstone (NetEase)
• Boom Beach (SC)
• Plants vs Zombies (EA)
• SimCity (EA)
• Dungeon Hunter (Gameloft)
•Million Arthur (NetEase)
•Summoner’s War (Com2us)
Only 9 non-Chinese games made
into top 50 grossing in 2015

6. #1 #3 #3 #6#5 #15 #15
#17 #18 #19 #21 #23 #27 #29
#31 #36 #36 #41 #44 #45 #49 #50
#13 #18 #21 #32
22 games
4 games
#8 #46#93 games
Compared to 29 games in 2014

7. Opportunities for independent studios
IP building
- For studios with existing self-developed original IP with loyal
audience
- Find partners with expertise in new markets and platforms to
build the IP franchise
Publisher financed games
- Mature, experienced studios with robust game engines, solid
game design, and timely execution capabilities
- Find publisher with strong IP and create partnership; or find IP
and pitch to publisher

8. Build your value proposition
Core expertise
- Be focused in your game development, build expertise in a
genre and continue to grow that expertise
Proven metrics
- Build complete system (social, meta, economy), prove your
metrics
- Find the publishing partner with know-how in your game
genre
Do the math
- Build realistic financial models
- Align expectations
- Show me the ROI!

9. We continue to invest and build value
-Mobile attribution,
aggregation, and
analytics company
- Helping mobile
advertisers optimize
their marketing
spend and get better
ROI, all in one
platform
- Ad network company
that started out in SE Asia
market, and now
expanding rapidly into the
global market
- Successful IPO in China
in 2015 with 1B US market
cap
- Acquired GameAnalytics
and NativeX
- Top console team raised
millions through crowd funding,
building cross-platform global
IP franchise through investors
and partners
- Independent mobile producer
launching sequel to his
successful original IP game
- Top mobile studio building
sports game franchise
- AAA PC studio building
original IP and receiving
multiple offers to develop for
other platforms
AnalyticsAd Tech/
Publishing
Game
Developers

10. Amy Huang
NetEase Capital
Head of Global Games Investments
Email: amy_huang@corp.netease.com
Thank You