Coconut Island builds on domestic success of its simulation game, expands overseas

A simulation game titled Jiangnanbaijingtu, or the Scenery of the Water Towns in South of the Yangtze River, has emerged a blockbuster in China this summer.

Launched on July 2, the game jumped to the top of Apple App Store's list of free games in China in less than a month.

The game allows players to simulate the management of Chinese cities. Among the cities included in the game are Nanjing, Suzhou and Hangzhou, set against a background of the Ming Dynasty (1368-1644).

Players applaud the game for its strong traditional Chinese painting features. But few know that the China-oriented game was tested in overseas markets for one year before its release in China.

Bao Weiwei, co-founder and CEO of Coconut Island, the firm that developed and published the game, said a large number of the business simulation games developed by overseas studios set their stories in small towns that have a background more familiar to the Western players. But there are few simulation games based on Chinese small towns.

"Since we are based in Shanghai and well aware of the traditional Chinese elements like the airy pavilions and pagodas, our experience of living in the Yangtze River Delta region has become the inspiration for the game," he said.

With the game tasting success in the Chinese market, Coconut Island has decided to launch the official Japanese, Korean and English versions of Jiangnanbaijingtu in the coming months.

The firm is young and small, with a staff of about 60 people. But, it has been invited to a number of international industry pageants such as the Apple Worldwide Developers Conference and Google's annual developer conference.

Despite the industry recognition, Coconut Island's outbound reach has come in a round-about way. Established in 2009, the firm started to develop mobile games for iPhone first. From 2012, it also began to roll out mobile games for the Android mobile phone operating system.

So, up to 95 percent of the company's users and income came from overseas markets in the firm's initial years.

But as the Chinese mobile game market began to grow in 2014, Coconut shifted its focus to the domestic market. At present, overseas market accounts for about 20 percent of Coconut Island's annual income.

The figure is far from enough. So, more efforts will be made to explore overseas markets in the next few years, Bao said.

The Asian market where the Chinese culture has a stronger influence will be the first stop of Coconut Island's outbound plans.

Instead of directly setting up branches in Asian markets, it will first invest in some small studios or companies to focus on content creation.

While Coconut Island is better at building in-app purchase systems, which is the strength of most Chinese mobile game companies, a combination of the above two will secure success in overseas markets during the firm's early stages, Bao said.

The genre of a game matters a great deal, especially in the Western markets where the players are not very familiar with the Chinese culture. Coconut Island will emphasize game mechanics in these markets. Action games, for example, can easily win the hearts of overseas players, as there are hardly any cultural barriers in such games, said Bao.

Mobile games will be the focus of Coconut Island in the European and US markets. As Bao explained, console games are still the mainstream in overseas markets. In this sense, overseas game companies may not have paid as much attention to mobile games.

So, Chinese game companies, which are better at developing and publishing mobile games, can reach these markets to fill the gap.

For small Chinese game companies, it is now a must to go overseas as competition in the domestic market is highly intense, according to Bao.

The mobile games market in China is especially fiercely competitive, with market leaders Tencent and NetEase commanding more than 70 percent of the total market share between themselves.

On the other hand, opportunities abound in overseas markets, said Bao. In the first place, the global gaming industry is still nascent compared to the movie industry. There is no one definite dominant voice in the gaming industry, which indicates opportunities for Chinese companies, he said.

According to the China Game Industry Report released by the China Audio-Video and Digital Publishing Association in late July, games developed by Chinese firms earned $7.6 billion in total revenues during the first half of the year, up 36.32 percent from a year earlier, despite the COVID-19 epidemic.

The United States, Japan, and South Korea have been the three top markets, accounting for 28 percent, 23 percent and almost 10 percent of the total overseas income respectively.

More importantly, China has achieved rapid economic growth over the past four decades and the momentum will be sustained in the next 20 to 30 years.

People's demand for cultural consumption will increase, which will be translated into prosperity for the country's cultural and innovative industries, explained Bao.

"Cultural products with higher quality will naturally find outlets in overseas markets and eventually be accepted all over the world. Japanese artists who gained fame in the Western markets in the 1980s and 1990s are proof of such outbound trajectory," he said.

Inspired by Disney and Pixel's movies, Coconut aspires to produce cross-culture works in the future.

"The human emotions implied in all cultural works can be shared by people all over the world. As we stress human touch in all our games, we hope we can one day come up with games with global influence," said Bao.