Netvios tells us the differences between the VR gaming market in China and in the West

When I visited China at the beginning of the year, I had the pleasure of visiting Netvios offices in Guangzhou and speaking with Anjie Cao, the CEO of the company. She gave me a very interesting presentation about the status of VR in China and the difficulties of launching a VR game there. In this article, I collected the most interesting tidbits of that presentation to share with you, so that if you want to start distributing your content there, you know what you have to do.

Netvios

Netvios is a joint venture between Netease (one of the most important gaming groups in China) and Survios (which you know for sure for games like Creed), with the participation also of OPPO. The purpose of Netvios is to act as a publisher for VR games in China, in particular for abroad games that want to enter the Chinese market. According to the company, Netvios is currently the N.1 VR game publisher in China,

Netvios offers a long list of services for games that want to enter the Chinese market and is always interested in looking for the next big hit. It’s been the official Chinese publisher of blockbuster titles like Beat Saber, The Room, and Creed, but also of more indie games like Captain Toonhead. The CEO, Anjie Cao, impressed me not only for her kindness but also for her passion for gaming and VR. She define multiple times herself as a passionate person about games, and showed me a great attitude, saying that her top priority is finding games that can make people have fun above all the rest.

She gave me a presentation about Netvios’s services and while doing that explained to me a lot about the Chinese market.

The gaming VR market in China vs abroad

When Ms. Cao showed me the slide about the Chinese virtual reality market, I had a little shock. The situation she depicted was very different from the one I was expecting.

By June of 2022, while the Quest had sold something like 14.8 million units worldwide, all the VR headsets in China combined had sold to consumers 0.8 million devices, with Pico being the market leader. Remember that in China there are as many people as in Europe plus the United States together, that is in 1.3B. 0.8M in this huge market means that the consumer market in China has never taken off. I visited the company in February 2023, and she told me that the situation wasn’t changed much in the previous month, apart from the number of headsets sold growing beyond 1M. China has still to wait for its Quest moment. The consumer VR market is also not helped by the fact that the government is pushing for useful enterprise uses of XR while pushing away teens from playing too much. The situation is so very different from here, where the consumer market is growing. In China, VR is instead strong in the enterprise sector.

A limited market means a less tolerable error rate of marketing behavior. Therefore, it is quite a challenge for developers to promote a VR game in the Chinese market without local publishers.

But there is one sector where VR is going strong among consumers: VR arcades. In Asia, location-based entertainment (the arcade rooms) is very popular, and people love to play every kind of game, including VR ones. The location-based market covers 400M people, so this is a good place where to propose your VR game. In the West, on the contrary, VR arcade rooms are still recovering after the big hit they had during the pandemic, and Quest is where game studios are making money. NetVios covers with its distribution more than 4,000 arcades in China, which count for more than 80% of the total.

The different tastes of gamers in China

The market is different also because people have different habits and different tastes in China. Anjie told me that if a game is a success in the West, doesn’t mean that it will succeed in China, too. She mentioned the case of a very famous VR game (which I won’t mention to not hit its reputation) that has been ported as-is in China and had just a mild reception. Games should be properly localized not only in the language but also in everything they offer. Usually, games need modifications to be successful in China, to make them more conformant to the tastes of local people.

She also told me that in China the multiplayer aspect of games is overly important. People want to play games with friends, they want something that creates bonds, something they can talk about when they meet. Games must have a “social value”. This explains a lot of the success of mobile multiplayer games, and also of arcade rooms. Arcade gaming rooms, as I was saying before, are very popular also because you can go there with your friends and have fun with them. They have social value. Console gaming is less popular (2% of the market) because has less of this social component, and so is at-home virtual reality. Very few people have a VR headset now, so most probably you can’t play a VR game with your friends, and the social component gets lost. This sociality aspect is something you have to consider very well when porting your game there.

I remember when I was discussing my game HitMotion: Reloaded with HTC’s “Mister President” Alvin Graylin and he told me that in China is also important the impression you give while playing in VR. If when you play a VR game, seen from outside you look like an idiot, people won’t want to play your game anymore. You have to look cool in the videos that people make of you. This is something I never had to consider in the West, but in China it is important, and it is part of all the social aspects I was mentioning above.

It seems also that with Chinese gamers you can’t have a bad first impression: if the first impression is wrong, most probably they won’t give you a second chance, so you had better to release a game there only when it’s truly ready for that market.

Marketing

It is not only the games that have to be adapted in China, but also the marketing strategy. Take for instance social media: for us, Instagram, Twitter, and Youtube, are very popular, but in China, they are all blocked. The only social media we have in common is TikTok, but even in this case, actually, China has a separate version that is called DouYin.

The VR games on top of the classifications of the most played games on our Western platforms is completely different from the ones on the rankings in the Chinese VR platforms. Apart from differences in cross-culture gaming preferences, it is more due to the influence of marketing activities. Netvios provides marketing for its games via the classical online marketing strategy mixed with other offline forms like E-sports competitions.

It advocates a marketing concept of customization. Its (professional) marketing team combine the features of the game and local customers’ preference, using different types of local marketing channels and accurate user operation to achieve long-term retention. Another point that NetVios deeply appreciate is the relationship with gamers.  They organized abundant gamer activities both online and offline, encouraging core players to create a variety of content on social media and communities. Colorful content is the best advertising to call more players to participate online.

For the online, one of the platforms that they have found to be most effective is BiliBili, which is a bit like our Youtube.

As you can see, it is impossible for a Western studio to perform marketing alone. I challenge you all non-Chinese people to recognize the names of the platform listed in the image above.

Legal

One thing which is for sure worth having a local partner in China is the help with all the legal stuff.

Publishing a VR game in China is quite complicated, and you need your game to be approved by the government, which must apply its “quality control” to verify that the game complies with its standards. This process is slow and painful, but if you have a strong local partner like Netease, it becomes much faster. Netvios can even provide some local Chinese developers that modify in full autonomy the game so that to make it is compliant with Chinese legislation in a fast and efficient way without making the original game studio waste time in this operation.

Another prominent legal problem is the one of IP. It is not a secret that protecting your IP in China is pretty hard when you are a foreign company (“pretty hard” here means that your patents are considered like written on toilet paper). But I’ve been told from various sources that if you have an established partner in China, you can actually protect your intellectual property. Anjie told me that when Creed launched, Netvios managed to take its clones down in 3 days.

Final impression

I appreciated a lot the presentation about Netvios that Anjie gave me. Thanks to it I have been able to understand a bit more about the Chinese VR market and the difficulties a Western studio may have in entering it. Since when I started approaching China, all people always told me that if someone wants to enter the Chinese market, that person MUST have a local partner. VR gaming is no exception, and only with a trusted local partner, that can guide you in providing a product local people may like and market it on the right channels, you can make your game succeed.

Netvios looked to me as one of these trusted partners. Anjie told me they are always looking for new game studios to work with, so if you have a solid title, may it be a AAA game or an indie one, and you want to sell it in the huge Chinese market, feel free to contact them to evaluate a collaboration (or ask me for an introduction).

(Header image by Netvios)