China flexes its muscle in gaming as 272,900 people flock to ChinaJoy

Disclosure: The organizers of ChinaJoy paid my way to Shanghai. Our coverage remains objective.

SHANGHAI — China has become the world’s largest game market, and it has a trade show to match that fact.

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ChinaJoy drew more than 272,900 visitors this year. Despite the sweltering heat, that attendance was up from 250,224 a year ago. That is the largest attendance in the 12-year history of the country’s biggest gaming show. Global game companies with big booths included Sony, Microsoft, Electronic Arts, Blizzard Entertainment, Unity, Epic Games, Nvidia, Intel, Advanced Micro Devices, and others.

Han Zhihai, CEO of Howell International Trade Fair, said that an estimated $350 million in business-to-business deals were expected to be closed at the show, which occupied an astounding 120,000 square meters of space across 11 gigantic halls on the grounds of the Shanghai New International Expo Centre.

It’s fair to say that ChinaJoy is changing as China’s $22 billion industry becomes more international. There was a lot of focus on esports, virtual reality goggles, and mobile games, in addition to the core PC gaming roots of the show. For the second year in a row, Microsoft and Sony also had booths to market their game consoles to the domestic market. Some booths disappeared amidst consolidation in the industry. But there were also a ton of 1,000-employee game companies at the show that I had never heard about before.

ChinaJoy has been known for its show girls, or “booth babes,” who attract attention based on sex appeal. But Zhihai and other officials are trying to curb that so that the games and technology stand out more. Model agencies whose employees didn’t wear enough clothes faced fines of up to $1,600 per violation. The suggestive outfits were still plentiful, but many of them had some bearing to the games that they were touting.

I interviewed Zhihai in an air-conditioned room at the Kerry Hotel, the place adjacent to the show where plenty of deals happen. Here’s an edited transcript of our interview.

GamesBeat: How is this year’s China Joy turning out? Has it been different than last year?

Han Zhihai: So far, so good. The biggest difference is that this year, we have more exhibitors from more countries. It’s become a more international show. There are some very large games being shown here.

GamesBeat: The consoles have launched in China now. They started out small in Shanghai, and now they’re spreading more broadly across the country. What do you think about the state of the console market here?

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Zhihai: I’m very optimistic about the future of console games. The government has just released its policy for the PlayStation 4. One disadvantage, though, is that we still lack big Chinese game releases for these platforms. In the future, we want to develop more games for these platforms to sustain that high-end market.

GamesBeat: You have more than 273,000 attendees coming through China Joy. What do you learn about Chinese gamers each year when they come through the show?

Zhihai: Chinese gamers are very young and enthusiastic. They stand in line for a long time here, despite the hot weather. I’ve been very touched by the phenomenon here. As an organizer, we try to provide a very fancy show, a big exposition and more high-quality games for Chinese audiences. Like our slogan this year, we want to make happiness the most important thing.

GamesBeat: What about the companies that attend the show? Is there a more interesting mix of mobile companies now or fewer PC companies? What do you see as far as changes in the companies that exhibit here?

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Zhihai: We do see more and more mobile game developers coming and fewer PC developers. Mobile games are enjoying explosive growth in China. In 2014 there was about 109 billion RMB in the mobile game industry. This year the figure has grown to 120 billion. It’s a huge increase. Against that background, we have more mobile game developers coming to our exposition.

GamesBeat: The growth rates in China are still among the fastest in the world, but they are slowing down. Is that a concern, especially alongside the fluctuations in the Chinese stock market?

Zhihai: When the economy isn’t doing well, people tend to have less income. They don’t want to go shopping so much, so they stay at home playing games. The game industry might not benefit as much when the economy is doing well — maybe this is an opportunity for gaming.

GamesBeat: What kind of image do you want China Joy to project to the rest of the world, as a representation of the Chinese game industry?

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Zhihai: I want China Joy to be a bridge linking China and the rest of the world. This is a platform to introduce high-quality games into the mobile market. We can share the best games with Chinese characteristics with the rest of the world. I want the show to be more professional and more influential, so game developers in every country can enjoy the Chinese market.

GamesBeat: Some westerners still think the image of all the booth girls dominates China Joy. They look a bit different this year, though. What can you say about that?

Zhihai: The principle that I adhere to is that the show girls are complementary. They’re leaves. The flowers are the games themselves. We’ve set up rules this year to manage that presence and bring things back to that main principle. This phenomenon mainly resulted from how the media reported on this event. We should communicate more to the media focusing on professional skills and core technologies. This year we’ve invited CEOs from Tencent, Microsoft, and other core gaming companies. This is what the media should focus on more. We’re hoping to go further in our relationship with the media to help them report on this event in a more rational way.

GamesBeat: I see a lot of deal-making happening. It seems like that’s something you could actually measure, how much business gets done at the show.

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Zhihai: Most of the deals we see come from the B2B sector. For example, this is the third year we’ve set up a B2B hall. The first year, the sales volume was about $80 million. Last year that increased to $250 million. This year we’re estimating the figure at $350 million. It’s a very big increase. In different countries — Korea, for example, last year had only 100 square meters for 30 companies. This year they had 300 square meters for more than 50 companies. More Japanese companies have come to the B2B area as well. We’re looking forward to more focus on B2B development.

GamesBeat: Is that a measurement of the money spent on exhibition space or the volume of business conducted in that area?

Zhihai: That’s the amount of trade conducted on site. For example, if a Chinese game is sold to a foreign company.

GamesBeat: I saw the speech by the deputy director Song Jianxin from the government’s SAPPRFT (State Administration of Press, Publication, Radio, Film and Television) agency. It was interesting that he spoke about encouraging Chinese companies to export their games and Chinese culture worldwide. I wonder how far you think that can advance, and what might be the best strategy to make it happen.

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Zhihai: The exhibitors coming from places like Korea, Singapore, and Japan have their exhibition fees funded by their home governments. In my opinion, though, the money isn’t the most important thing. The important thing is making better games, as well as getting involved with a foreign culture as soon as possible. That’s the only way to make games that sell well in foreign countries. It takes more than just spending money to exhibit abroad.

GamesBeat: Chinese companies have to face censorship when it comes to issues like sex, politics, and the military. Is that a disadvantage?

Zhihai: Censorship might have some influence on foreign games coming into the Chinese market, but it’s not a problem for Chinese games going abroad. More and more, the government has loosened its policies. Microsoft and Sony are at China Joy this year. The government has opened up free trade zones. Our market is opening further and further. I’m expecting to see other policies loosened in this area as far as software is concerned. In the long run, I see a very bright future.