Increased competition and the advent of 3G will be a winning formula for mobile game companies in China, according to Fugu Mobile's Ravi Shankar Bose

There will be an upsurge in the mobile online game market.

Shanghai. June 26. INTERFAX-CHINA - China is home to 560 million mobile phone users, and so poses great opportunities to entrepreneurs like Ravi Shankar Bose, co-founder and vice president of international operations of mobile game developer Fugu Mobile. In 2007, revenue generated by mobile games developed using the Java and BREW programming languages reached RMB 777 million ($113.1 million) in China, according to Analysys International. High growth momentum is expected to be maintained this year, with revenue to potentially hit RMB 1.29 billion ($187.8 million). Fugu Mobile is one company keen to make the most of this growth. Established in 2006, the company is an emerging mobile game developer as well as a mobile marketing agency headquartered in Shanghai. In addition to mainland China, Fugu Mobile also sells games to Hong Kong, Singapore, Malaysia, India and Australia, among other regions. Chinese-language games account for approximately 40 percent of its offerings. game developer Fugu Mobile.

Bose used to work with Mobile2win, a mobile gaming and marketing service provider based in China and India, whose China arm was acquired by Tokyo Disney in April 2006. Bose was the head of gaming business for Mobile2win, where he was involved in setting up the company's mobile gaming business and making it profitable within two years.
About a month ago, the Chinese government announced the country's long-awaited telecom industry restructure plan. The reshuffle will restructure five national operators into three integrated operators that each provide both fixed-line and mobile services. China Telecom, which has announced it will take control of China Unicom's CDMA network in October, will soon become a new competitor to China Mobile and China Unicom.
Bose expects the restructure to usher in 3G in China and more competition between operators, and thus more business opportunities for his company.

More competition means more opportunities
"The telecom restructure will create a level playing field for the operators. I expect that they will all be competing for good content. This is good news for content providers. Since there will be three operators, we will offer a larger number of games because they may have different requirements. For example, China Mobile may want to focus on games related to the Olympics, while other operators may want something else," Bose told Interfax.

Bose also expects Chinese telecom operators to be more flexible in game billing models after the restructure. Fugu Mobile works with an operator in the Philippines that allows users to pay for the next level of a mobile game by SMS. The user sends a text message to the carrier and receives a password back, which can be used to open a game's next level. China Mobile does not yet support this kind of billing model, he said.
"After the telecom restructure, operators will look for new models. At present, our money in China just comes from downloads. In the future, China Telecom may be more open to try out this [the Philippines'] model. It is good that we have a proven concept in the Philippines that we can use as a case study to show China Telecom," Bose said.
The Chinese government has not announced a timeline for the telecom restructure, but Bose expects it will be completed in 12 months as "it will take some time to merge these large groups."

Mobile online game market to surge in 3G era
Bose sees China's mobile game market shifting from downloadable games (those that can be played without requiring a network connection) to mobile online games (those that require a connection to the network during play), driven by the move to 3G and the greater competition between operators due to the restructure. In addition, the launch of 3G mobile networks once the telecom restructure is complete will support games with richer graphics and multiple players, he said.
"There will be an upsurge in the mobile online game market. We already have several mobile online games that are doing well in 3G countries. We will be able to offer them in China," he said. Fugu Mobile currently offers three mobile online games overseas - Battleships, Greyhound Racing and a darts game.
In China, the company focuses on providing downloadable games because the speed of the country's current 2.5G network is not fast enough to support real-time interaction. However, it has created a unique formula for China by adding interactivity to its downloadable games.
"In our Dress Up Dolls game, we allow the user to dress up the doll in the game, and then submit the creation to a Web site so that other people can see and rate it. In some of our sports games, we allow the user to submit his or her score to a global leader board. Playing the game does not need any network connection. The connection only opens when the user submits their creation or score. This 'mobile plus online' formula is a middle ground, because the network speed does not support real-time interaction very well," Bose said.

Distribution through trusted partners
Fugu Mobile now offers 146 casual mobile games and distributes them through carriers, independent portals and retail outlets. Duo Guo, Arena Mobile and Moffy Ltd. are Fugu Mobile's main distributors in China. Duo Guo is a Shanghai-based company that operates more than ten mobile content retail stores in subway stations and shopping malls. Consumers can purchase games at Duo Guo outlets and have the games transferred to their mobile phones by Bluetooth.
"We have supplied 30 to 40 games to Duo Guo. Such a large number is not possible with a telecom operator. It's a long process for a game to get on China Mobile's platform. However, China Mobile's platform is still the most effective. Most downloads come from China Mobile," Bose said.
Mobile game industry insiders say that downloadable games are vulnerable to piracy, causing many developers to switch their focus to mobile online games.
"Most pirated games are leaked from distribution partners. That's why we only work with large and trusted partners to distribute our games. This is our strategy," Bose said.