Member Article

From Gateshead to Chengdu - how Eutechnyx did it

Eutechnyx CEO Darren Jobling reflects on his long journey to make his officially licensed online racing games the first to be published in China and offers some advice to anybody looking to follow gaming’s very own Silk Road…

To get on in China, you had to get into China. It was with this piece of advice back in 2007 that we took our first single step on our Chinese journey.

We’d been on several explorative trips and became very impressed with the commitment and quality of the production companies we met out there. Although famous for its pandas, the region around the growing city of Chengdu really stuck out as a potential technology hub and it was an easy decision to take our first steps and locate our overseas team here. We’re in good company as there are now over 1,100 foreign companies located in this region.

The demographic shift in China has been seismic, with three quarters of urban households approaching middle-class status. Along with their growing wealth, they’ve developed a passion of western brands, for consumer electronics and, perhaps the greatest status symbol money can buy, cars.

Cars and driving are locked in the Eutechnyx DNA – we’ve been making racing videogames for over a decade. So when we thought about the emergence of this new gaming market and the parallel growth in car ownership - it was clear that the combination of the two was a recipe for success.

Our flagship title Auto Club Revolution (ACR), which is the product of 18 years of experience in creating racing titles, was, we thought, the perfect opportunity. We’d take the free to play business model from the East, and combine it with what we know people want to do in the West – buy, customise and race officially licensed cars.

We were quick to identify China as a ‘blue ocean’ for racing games as there are no other officially licensed online racing games available to play. Think of that - no Gran Turismo and no Forza.

For this market, however, you quickly learn to forget all of your preconceptions and enter the market with an open mind. The racing game market in China is solely centred around karting titles and very little else so when their customer think ‘racing’ they actually mean ‘karting’.

The concept of racing to win is not as clear cut as it is in the Western gaming world – just taking part is a huge element in the enjoyment as well as the social engagement it brings. It was clear we needed a knowledgeable partner to guide us through these differences in order to mould our game for the Chinese market.

I can’t underestimate how important getting this step right is. You need to find a partner that you respect, trust and ideally who has similar ambitions on the Western games market as you do for China.

For Eutechnyx, our starting point was ChinaJoy, the Shanghai-based expo dedicated to digital entertainment. This year it runs from July 27 – August 3. If you’re serious about working with the Chinese this is the place you need to be, and the perfect place to start. Be prepared to spend a lot of time in China, meeting companies, building relationships, trust and understanding, if you want to be successful.

After meeting a number of interesting companies we were approached by Kongzhong, (NASDAQ KONG: $331M market cap). Kongzhong enjoys huge success in China with World of Tanks and was now looking for more western content to champion in the east. Over the coming months, we embarked on regular meetings with the Kongzhong team, on both sides of the world, and we quickly realised we had a steep learning curve ahead of us.

The key to success in China is being able to understand, then change and adapt your product for local tastes. Doing business in China is all about building and growing personal relationships. From our initial reconnaissance mission to China to the eventual partnership with Kongzhong took us four years. It sounds like a lot of time to invest in building market understanding and personal relationships, but the potential rewards on offer are well worth that level of effort.

According to GO-Globe.com, Chinese online game market revenues are due to reach reached 113 billion RMB (US$18.5 billion) by the end of 2015, with 266 million players. So the potential rewards are huge, but be in no doubt, it’s going to take time, effort and a lot of patience.

I can honestly say I have been blown away by the commitment, passion and sheer output of all of the companies I have met in China. Unfortunately, the historical western games industry seems to have lost some of that momentum and drive, which makes our industry vulnerable to approaches from these companies eyeing our market with a high degree of envy.

To work with Chinese partners, you therefore have to be prepared to work hard, ask and answer a lot of questions and brace yourself for intense feedback, not just from your partner but also from the playing public in the East. Within a week of announcing Auto Club Revolution in China, Kongzhong were receiving 5,000 comments per day on the ACR China forums – see http://acr.kongzhong.com/.

ACR has officially licensed cars from over 50 of the world’s leading motor manufacturers including BMW, Ford, VW, McLaren, Bugatti, Bentley and some new partnerships yet to be announced. These companies are all keen to influence young Chinese players with their brand values, and want to be associated with ACR in one of the world’s fastest growing car economies.

ACR delivers the best-in-class racing experience in the free-to-play market whilst also providing a social platform for owning, customizing and discussing cars online. I’m excited by the challenge and potential rewards of establishing it as the de facto racing game in China.

The Chinese government recently announced that 2015 would be the year that China would overtake the USA as the world’s largest consumer market with over $5Trillion in consumer sales. If China is expected to become the number one market for Coca Cola and Nike then it’s safe to say that the video game industry should expect to be equally impacted.

I was asked what were my top five tips to anyone embarking on a similar adventure in China and I’d sum them up as:

1. Be prepared to invest your time, not just your money

2. Go with, and maintain, a totally open mind

3. Get out there! You need to see the scale of the opportunity and meet partners face-to-face

4. Forget your preconceptions, outdated words of wisdom from others and anything else that might potentially hold you back; let go and dive in, but find the right partner fast

5. Be prepared to work harder than you’ve ever worked before

Best of luck!

This was posted in Bdaily's Members' News section by Eutechnyx .