Electronic Arts Plugs Into China's Market
Can the company behind "The Sims" win over the Chans?
Videogame giant Electronic Arts Inc. will announce today plans to build a videogame studio in China, putting a stake in the ground in what is expected to become the world's largest online games market by 2007. The studio is a cornerstone of a broader EA plan to expand further in Asia and could be a precursor to an acquisition or joint venture in the region. While EA has quickly grown into the world's largest videogame publisher with games such as The Sims and Madden NFL, the Redwood City, Calif., company doesn't have a strong presence in Asia.
"We want to hit a billion dollars [in sales] in Asia by 2010 -- and China is going to be a big part of that," said John Niermann, the president and Asia managing director of EA. EA's single largest Asian market now is Japan, where the company had revenue of $71 million in the year ended March 31.
The problem for EA and other games publishers in China has long been figuring out how to make money there. Rampant street-market piracy stifles the legitimate market for games distributed on DVDs, so Sony Corp. brought its PlayStation 2 console to China only earlier this year, and personal-computer game sales have long been stagnant.
But in recent years, China has bred a culture of online videogames entirely different from the TV console games of the U.S. EA and others say through online games -- which are run on large computers and played over a network -- they can stem piracy, and tap into a growing phenomenon. In cramped cafes or homes with broadband, China's online game players subscribe to an Internet service that simultaneously delivers a game to thousands of people, allowing each player to role-play characters. Rather than hard-core gamers, most players are ordinary kids.
Even though just a sliver of China's 1.3 billion people has Internet access, the numbers are still booming: There are more than 80 million Internet subscribers this year, some 16% of whom play online games, according to a new report by analysts at Dallas-based Diffusion Group. The researcher predicts that by 2007 China will become the largest online gaming market both in revenue and number of gamers. EA estimates China's online games market grew to $250 million this year, with hundreds of thousands of online gamers buying cheap subscriptions or pre-paid cards at convenience stores and from popular Web portals such as Netease.com Inc.
"This is the first time that we have seen a business model in China that lets customers pay for online games," said Erick Hachenburg, an EA senior vice president who recently moved to China to head up the company's global online gaming work from the new studio.
In interviews and analyst meetings, EA executives this year have been floating plans to expand further into Asia and have said they have looked for partners and potential acquisition targets. With annual sales of $3 billion, EA is the world's largest publisher of videogames and dominates the U.S. market. But to continue to grow, the company needs to expand its global footprint, EA executives and analysts say.
"Are they going to take a risk to miss out on the China market? The answer to everybody would be no," said Wallace Cheung, an analyst with DBS Vickers Securities in Hong Kong. "Right now the best entry point is online games."
To date, online titles in China have been dominated by Taiwanese and Korean publishers such as Webzen Inc. and NCsoft Corp., although domestic Chinese developers such as Netease and Shanda Interactive Entertainment Ltd. have recently made strides. EA will be the first big American maker to jump in -- though many in the industry consider it a relatively late move, considering EA has no timeline for when it will begin to produce games for the domestic market.
The move also marks a considerable adjustment for the company: Online games are a service, rather than a product you buy at Wal-Mart, like the bulk of what EA sells elsewhere. The company has a troubled history with online games in the U.S., where it lost at least $300 million on a big push into the online business a few years ago. It is now rebuilding its U.S. online business through partnerships with Sony and Microsoft Corp. Lacking experience in online games distribution in China, "looking to partner with a Chinese company makes sense," said Mr. Hachenburg. "We are talking to everybody in the market," he said, but declined to name specific prospects.
When the new studio starts, it will first work on customizing EA's popular international franchise games.
"We have to figure out how to take an established game like The Sims and customize it for the market, and make it work online," Mr. Hachenburg said. EA's popular international franchise titles should be available in China next year, he said.
But EA's longer-term goal is to build a team of 500 engineers, designers and artists in China to develop new titles specifically for the domestic market. Mr. Hachenburg declined to say how much the company would invest in its Chinese operation, but described it as "significant."
"We want developers who understand the local culture and will build the games that Chinese players want to play," he said.
While EA's entry will bring considerable experience, well-known game titles and software graphics libraries to the Chinese market, building original games may prove to be a challenge.
The games that are popular in China don't always resemble EA's American hits. "Chinese players are not typical gamers in the Western sense -- they need a game that is simple and easy to play," said Persy Zhang, the general manager of Object Software, a Beijing-based videogame maker. EA's fortunes are built on videogame versions of popular sports such as football and basketball. In recent years the company has also built franchises around games based on popular movies such as "Harry Potter" and "The Lord of the Rings."
Popular online games in China typically celebrate teamwork, giving an individual player a view of a whole group from an aerial view. Other popular games are based on Chinese history.
Zheng Da, a 32-year-old engineer in Beijing, spends three to four hours every day playing "San Guo Online," a multiuser strategy game based on a Chinese historical novel, "Romance of the Three Kingdoms." In the game, players work together toward the ultimate goal: the unification of China.
"The game gives you fresh experience every time you play it," said Mr. Zheng, "as different combat strategies will bring about different results." But Mr. Zheng complains that the animation on his home-grown game can't compete with what he sees on games from South Korean or U.S. companies. The characters are so rough and the animation effects are so poor that the whole game feels like a shadow play, he said.
EA says the China studio will focus on developing games for the Chinese market, not outsourcing programming for games sold elsewhere around the world, such as what competitor Ubisoft Entertainment of France has done in China since the mid-1990s. But eventually, Mr. Hachenburg said he hopes that his China-developed titles will be sold around the world.
While some sports simulation games -- such as EA's "FIFA Soccer" -- have proved popular around the world, makers have more difficulty sharing other kinds of titles.
"The tastes of Asian players compared to Western and European players are still so unique," said Richard Garriott, a U.S.-based creative director for Korea's NCsoft. "Very often when people set off to try to create a game that works everywhere, it is usually fraught with peril," he said.
Another challenge will be finding experienced programmers to fill EA's studio. Mr. Hachenburg said he hadn't yet chosen a city in which to locate EA's new studio, but other Chinese game makers say EA's entry will intensify the competition.
"If EA sets up studio in Beijing, it would be a disaster for us," said Object Software's Mr. Zhang. "We are very short on talent now, and they will have to steal people away."
电子艺界勇闯中国
以“类比人生”开创辉煌的公司能赢得中国用户的欢心吗？
电子游戏行业巨头电子艺界(Electronic Arts Inc., ERTS)将于今日宣布在中国成立一家电子游戏工作室的计划，在有望于2007年成为全球最大网络游戏市场的中华大地上布下一枚棋子。这个工作室将成为电子艺界进一步拓展亚洲市场的基石，同时也是在亚洲市场进行收购和合资的先驱。凭藉著“类比人生”和“疯狂橄榄球”(Madden NFL)等游戏，电子艺界迅速成长为全球最大的电子游戏生产商。然而，这家位于加利福尼亚州雷伍德城的公司在亚洲市场并不具备强大的影响力。
“我们计划在2010年之前在亚洲市场实现10亿美元的销售额，中国是其中的很大一部分，”电子艺界总裁兼亚洲区董事总经理约翰?尼尔曼(John Niermann)说。目前电子艺界的亚洲业务收入主要来自日本，去年日本的销售额约为1亿美元。
电子艺界及其同行们开拓中国市场的计划一直有一个难题悬而未决，那就是如何在中国赚钱。随处可见的街头盗版市场遏制了这个通过DVD合法分销游戏产品的行业的发展，因此索尼(Sony Corp., SNE)直到今年年初才在中国市场推出PlayStation 2游戏机，个人电脑游戏销售额一直停滞不前。
但在这几年，网络游戏在中国风生水起，这与美国以电视机为游戏平台的方式迥然不同。电子艺界和其他同业公司表示，通过这种借助大型电脑在网络世界进行的电子游戏方式，他们可以阻止盗版，并涉足这个日益发展壮大的市场。在安装了宽带的狭小网吧或家中，中国的网络游戏玩家上网注册，与数千人同时参与某项游戏，每个人都在其中扮演一个角色。与以往的电子游戏高手不同，这些玩家往往都是些普普通通的孩子。
即使中国13亿人口中的很小一部分才有可能接触网络，但这已经是一个很庞大的数字。根据达拉斯Diffusion Group提供的数据，今年中国的互联网政策用户超过了8,000万，其中大约16%参与网络游戏。该公司还预计，到2007年，中国成为最大的网络游戏市场，不论是从收入还是玩家人数来衡量。电子艺界则预计，中国的网络游戏市场今年有望增至2.5亿美元，用户约有数十万。他们从便利店，或者网易(Netease.com Inc., NTES)等门户网站购买进行低价订购或者购买折扣预付卡来参与网络游戏。
“这是我们第一次在中国看到用户为网络游戏付款的商业模式，”电子艺界高级副总裁埃利克?哈成伯格(Erick Hachenburg)说。他最近移驻中国，在新成立的工作室负责电子艺界的全球网络游戏业务。
在今年的数次采访和分析师会议上，电子艺界的高级管理人士们都表示了开拓亚洲市场的雄心，还表示公司已经在为此寻找合作伙伴和潜在的收购对象。电子艺界年销售约为30亿美元，是全球最大的电子游戏生产商，是美国市场的龙头老大。但是，要想取得进一步发展，电子艺界的管理人士和分析师们都说，这就需要拓展全球市场。
“他们会冒险放弃中国这个市场吗？任何人对这个问题的回到都是：不！”DBS唯高达(DBS Vickers Securities)驻香港的分析师Wallace Cheung说，“目前最好的切入点就是网络游戏。”
虽然大陆的网易和盛大互动娱乐有限公司(Shanda Interactive Entertainment Ltd., SNDA)等企业近来取得了不小的进步，但到目前为止，中国网络游戏市场一直由台湾和韩国等地的公司所主导，例如Webzen Inc. (WZEN)和NCsoft Corp. (036570.SE)等。电子艺界将成为第一个涉足于此的大型美国公司，不过很多业内人士都认为这已经算是来晚了，况且电子艺界对于何时开始针对中国市场开发游戏产品都没有一个确定的时间表。
在中国成立工作室对电子艺界来说也是一项重大业务调整。网络游戏是一项服务，而不是那种能在沃尔玛(Wal-Mart)买到的产品，与电子艺界在其他市场销售的东西也不同。电子艺界在美国开展网络游戏服务的计划曾遭挫败，几年前的一次尝试导致了至少3亿美元的损失。现在，电子艺界携手索尼和微软(Microsoft Corp., MSFT)，再度重建美国的网络游戏业务。由于缺少在中国进行网络游戏分销的经验，“寻求与中国公司合作是一个合理的举措，”哈成伯格说，“我们接触了业内每家公司。”但他拒绝透露详情。
新工作室的第一项任务就是对电子艺界享誉全球的游戏进行按当地用户情况进行定制。
哈成伯格表示，“我们必须了解如何将“类比人生”这类已经成型的游戏改制成当地市场的格式，然后搬上网络。”他还透露，电子艺界全球知名的电子游戏产品明年就可以在中国上市。
但是，电子艺界一项更长期的计划是，在中国组建一个500人的工程师、设计师和艺术家队伍，专门针对中国市场开发游戏产品。哈成伯格拒绝透露公司对中国业务的投资规模，仅表示“相当可观”。
他说，“我们希望开发人员熟知当地文化，玩家也喜欢玩他们开发出的产品。”
虽然电子艺界此举会带来大量经验丰富且知名的游戏产品和软件图形库，但开发原创产品仍然是一项巨大挑战。
在中国大受欢迎的游戏与电子艺界畅销美国的游戏不同。北京的电子游戏生产商目标软件(Object Software)的总经理张淳(Persy Zhang)说，“中国玩家与西方观念中的玩家不同，他们喜欢简单易玩的游戏。”
令电子艺界大获成功的电子游戏是橄榄球和棒球等大众喜闻乐见的体育项目的游戏版本。这几年，公司也围绕著《哈里?波特》(Harry Potter)和《指环王》(The Lord of the Rings)等热门影片开发了一些游戏。
而中国畅销的网络游戏往往推崇团队合作，玩家通过角色扮演参与整个团队的行动。其他游戏则扎根于中国历史。
32岁的北京工程师郑达（音）每天要花三、四个小时玩“三国志”(San Guo Online)，这是一个基于中国古典小说《三国演义》(Romance of the Three Kingdoms.)的多用户策略性游戏。游戏过程中，玩家众志成城，终极目标是：统一中国。
“每次玩都有不同感受，”郑达说，“不同的战略会带来不同的结果。”但他抱怨说，这款国内原创游戏的动画效果不如韩国或美国公司开发的游戏。他说，角色设计都很粗略，动画效果也很差，整个游戏玩起来就像是一出皮影戏。
电子艺界表示，新工作室将致力于开发针对中国市场的游戏，而不是像九十年代中期进入中国市场的美国企业Ubisoft Entertainment那样，为公司在其他地区销售的游戏提供外包设计服务。但哈成伯格也表示，希望最终在中国开发的游戏能够销往世界各地。
虽然有些基于体育项目的游戏，例如电子艺界的“FIFA Soccer”，已经在全世界大获成功，但其他游戏很难这样获得各地玩家的欢迎。
韩国NCsoft驻美国的创意总监理查德?加利奥特(Richard Garriott)说，“于西方或欧洲的玩家相比，亚洲玩家的口味还是很独特。开发各地适用的游戏的尝试往往充满危险。”
另一个挑战就是招募符合电子艺界工作室标准的经验丰富的程序员。哈成伯格说，他尚未确定将工作室定在哪座城市，而其他游戏生产商已经纷纷表示，电子艺界的出现会加剧市场竞争。
“如果电子艺界把工作室设在北京，那就是我们的灾难。”目标软件的张淳就说，“我们本来就人手非常不足，可他们还会从这里挖人。”
