China is a huge market for gaming, but it’s tough to succeed in that country without help from domestic publishers. And help has arrived for one of Europe’s fastest-growing game makers.
Paradox Interactive is teaming up with Tencent to take two games to China. This deal will have Tencent bring Chinese-language versions of urban-planner Cities: Skylines and space strategy game Stellaris to the Asian country on behalf of Paradox. Those games have both found audiences in the West, and now, they could find renewed success powered by Tencent’s publishing power. In China, only a couple of gaming companies have a reach that matches Tencent (NetEase is one major competitor), and the company’s TGP service has already helped other Western releases like Don’t Starve Together catch on in a country that is otherwise nearly impenetrable.
“Paradox is a company whose games possess universal appeal, and I’m eager for the chance to share our games with a broader audience in China,” Paradox chief executive Fredrik Wester said in a statement. “It’s important to us that gamers everywhere have the same high-quality experience with our titles. Tencent is the biggest game publisher in the world, and we’re glad to have such a capable partner. We know their platforms and their expertise will achieve excellent things for games like Cities: Skylines, Stellaris, and many others to come.”
Getting into China could prove more and more important for Western games as we move deeper into this century. For 2016, the country will likely account for nearly a quarter of all revenue spent on video games, according to industry-intelligence firm Newzoo. By the end of this year, it will generate $24.4 billion in spending, which makes it a bigger market than the United States with its $23.5 billion.
Of course, the difference between the United States and China is that the former typically has much more open trade laws, which enable companies from all over the world to release entertainment products for consumption. For the most part, a Chinese developer can build a game and launch it on Steam or the App Store in the U.S. with minimal effort. In China, however, the government must approve every foreign game that enters its territory. What this does is effectively eliminate independent publishing and distribution because it is far easier to go through a company like Tencent, which can bypass approval or get it fast-tracked.
Paradox has evidently done the calculus and found that splitting revenue with Tencent is worth it if it can get a foothold in China in the first place.