How Google Play could fix the frustrating, impenetrable Chinese mobile gaming market

China has a massive mobile gaming market, but it’s not a viable option if you’re a Western developer. That could change if Google returns to the world’s most populous country.

Smartphone and tablet gaming generated $5.5 billion in spending from Chinese players last year, according to Asia market-intelligence firm Niko Partners, but only a tiny portion of that went to foreign developers. This is for a few reasons that (such as cultural differences), but many studios don’t even attempt to deal with those because it is too difficult to navigate the market’s splintered Android market. Google left China in 2011, so the country doesn’t have Google Play. Instead, between 200 and 400 independent Android stores have popped up in its place.

Android’s fragmentation has led to an ecosystem where developers from Europe, the United States, and elsewhere have no choice but to team up with local Chinese publishers that have established relationships with the various channels. This has many hoping that the rumor that Google Play will return to China is true, and that the people in charge of the official Android app market have the willingness to disrupt this valuable region.

GamesBeat interviewed several executives working in the Chinese mobile gaming space at the Casual Connect Europe event in Amsterdam earlier this month, and most of them think that Google has a chance to change some things — even if it will have to struggle to do so.

Gamers, developers, and publishers all want it

“As a developer, we really want Google Play to enter China as soon as possible,” Andrew Chang, vice president of Three Kingdoms Now developer RedAtoms, told GamesBeat.

He wants Google Play in China because Android is a mess there. It’s not just the hundreds of different app markets — it’s that developers often have to give up more than half their revenues between these Android channels and the publishers. And even though this benefits some publishers, Netease, one of China’s biggest publishers, wants Google Play in China as well.

One of the biggest factors here is that developers often have to split their revenues with far more partners in China than compared to other regions. After the publishers and Android channels get their cut, the studios frequently end up having to give up more than 50 percent of their revenues.

“[Android is in] a terrible situation,” Netease international business manager Gary Huang told GamesBeat. “From Netease’s perspective, we are happy if Google comes back. It’s good for publishers and developers. And the Chinese government probably knows this.”

The current rumor is that China is negotiating with Google to get the company back in the country. Google exited the region after fending off a cyberattack that originated with the Chinese government. Huang thinks that Chinese officials are feeling pressure from multiple sides to reconcile with Google.

“China is a member of the World Trade Organization, and the government is likely feeling pressure from other governments to let services like Google Play [operate more freely],” he said. “And China is also probably feeling pressure from the users. If I’m Chinese and well educated, I will always ask why I can’t access Google Play in China. They are trying to encourage the government to become more open.”

Why Google Play matters

Google Play would instantly make China easier for foreign developers, according to Yodo1 Games business development manager Matthew Leopold.

Almost no foreign game, Western or from other Asian countries, performs well in China. Supercell’s Clash of Clans has made some progress, but it’s not even in the top 10 highest grossing apps. And while this is partially due to Chinese players wanting games that fit their taste, it is also due to the difficulty of even testing games in China. With so many Android marketplaces and unfavorable publishing deals, most studios avoid the country completely.

“But the whole situation is going to change [with Google Play],” said Huang. “There will probably be fewer and fewer channels, and the remaining channels will likely lower their costs.”

Huang predicts that Google Play will end up as the go-to market for all foreign developers. That means it will attract a lot of exclusive content that other stores won’t have. That’ll make it a go-to source for enough gamers that many of the smaller channels will no longer have the room to compete. And those that remain will feel pressure to lower their prices since Google will only take 30 percent compared tot the 60 percent to 70 percent that publishers and Chinese distributors are taking now.

Some developers even have hopes that Google will make mobile advertising work in China, which is rare in China today.

“My biggest frustration is I talk to developers all over the world, and I have to say ‘no’ to great games because they are very ad-based,” he said. “And there are certain games that it’s not possible to turn into something that is more deeply monetized.”

Finally, Google Play could give developers a chance to fight copyright infringement.

“I think Google Play will also lend legitimacy to China,” 6Waves executive director Stephen Lee told GamesBeat. “The problem has been that when developers release a game in the West, they’ll often find clones in a marketplace in China the next day. To be able to enforce copyright protection and to track that down and communicate with the marketplace, that’s a real challenge right now. So Google Play could only be a good thing for that.”

Google Play will have it rough

But even if Google  does return, it’s going to face a lot of competition.

“The market is really taken up by a couple of huge players,” said Leopold. “But the reality is that it is going to grow very slowly. It’s not going to have the market share that the others have.”

Tencent, China’s biggest Internet company, also runs its own app store, and it is by far the biggest publisher for mobile games. Most people have its channel installed thanks to its ubiquitous QQ/WeChat communication apps. WeChat is a portal where people in China talk with one another and find games and news and do a dozen other things. This has helped Tencent overtake its competitors like Qihoo 360 and Baidu, and Google Play is probably not going to overtake the WeChat platform any time soon if ever.

“This market is so mature,” said Chang. “So, at this stage, it’s going to be tough for Google.”

But even if Google Play doesn’t take the lead over the competition, the company is in a position to help shape the future of China as a center for gaming. It could provide a path for foreign developers into one of the most lucrative markets in the world. If that is successful, it could force the other players in this region to change how they do business to make it more friendly for outside studios.

Disclaimer: The organizers of Casual Connect paid my way to Amsterdam. Our coverage remains objective.