Alibaba to launch new mobile gaming platform

By Chen Tian Source:Global Times Published: 2014-1-8 23:33:01

China's e-commerce giant Alibaba Group said Wednesday that it plans to launch a mobile gaming platform, which will give developers 70 percent of their products' earnings as opposed to the market average of 50 percent.

Alibaba Group said in a statement e-mailed to the Global Times that it will "use all of its platform resources to break the status quo of how games are distributed and how earnings are shared between the game developer and the platform operator," and it will also challenge "Tencent Holdings' dominant position" in the mobile gaming market.

The company said it plans to give developers 70 percent of their games' sales revenues, keep 20 percent for itself to cover the costs, and use the remaining 10 percent to support education for children living in rural areas, according to the statement.

Gu Jianbin, director of the company's Public Relations Department, told the Global Times Wednesday the platform will be launched "soon," without revealing the specific time.

China's online gaming market has been growing quickly in recent years. In 2013, mobile gaming revenue was 11.24 billion yuan ($1.84 billion), and mobile gaming gained over 246 percent year on year in 2013, which was one-eighth of China's gaming market, Song Jianxin, director with the digital publishing department of the State Administration of Press, Publication, Radio, Film and Television, said Wednesday.

Liu Chunning, head of Alibaba's digital entertainment business, said in a separate statement that the company's upcoming mobile gaming platform would be offered free to developers for the first year.

Yan Huawen, a Shanghai-based online gaming analyst with iResearch Consulting Group, told the Global Times Wednesday that in most cases, game developers and distributors each get half of the sales revenues.

"Mobile game developers rely on platforms to distribute their offerings, and customers depend on the platforms to buy their desired products. This makes platform operators very powerful, so they tend to get a pretty big share of the sales revenue," Yan said.

Alibaba said that the online gaming platform run by one of its biggest competitors, Internet service titan Tencent, commands the largest market share. Developers, however, only get a small share of their games' sales revenues from Tencent, Alibaba said.

"[Alibaba] is very unsatisfied with Tencent's current dominant position in the gaming market," Wang Shuai, Alibaba's spokesperson said. "If platform operators continue to claim 90 percent of the games' sales earnings and developers only get 10 percent, the distorted gaming industry will remain unchanged."

Yan said Tencent negotiates earnings with game developers on a case-by-case basis, and the company takes some 40 to 50 percent of earnings share.

Tencent was not available to comment as of press time.

Shi Hai, CEO of Suzhou Snail Digital Technology, a 3D online game developer, told the Global Times Wednesday that developers should get 70 percent of the earnings, leaving the remainder to platform operators.

"The platforms should not take advantage of developers and they should take a smaller share of earnings in the future. That will facilitate healthy development of the mobile gaming market," he said.

Alibaba pledged to offer game developers easy online payment solutions with its Alipay service, and also vowed to help them promote and distribute their products to the firm's huge customer base, the statement said.

Yan said Alibaba's main disadvantage is its lack of experience in the online gaming market, but its large amount of comprehensive user data will help the company target customers and promote the games accordingly.

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