Chinese SNS Kaixin001’s Open Platform Experiment
Kaixin001 is experimenting with an open platform, inviting select third party developers to participate. Kaixin001 lags behind RenRen and 51.com, but all Chinese social networks are now slowly but surely moving towards openness. Kaixin001 is immensely popular with Chinese white-collar workers, with a total of 25 million daily active users (86 million registrations).
It originally rose to prominence by spamming and its viral social games (Parking Wars and Happy Farm). At its peak Kaixin001’s Happy Farm had 15 million daily active users and still has over 10 million today, according to Hans Tung, a partner at Qinming Venture, which invested in Kaixin001. Although Kaixin001 since refocused on relationships, games are one of the most lucrative monetization channels for social networks.
Are Social Games a Bubble? Future Growth Lies in Vertical Social Games
The moderator of the Financing for Social Games panel at ChinaJoy challenged panelists, “Is social gaming a fad? If so, let’s wrap this up in the next five minutes. Then we can all go home and start a Groupon clone instead.” Responses were mixed on the future financial fortunes of social game developers, though no one foresaw a collapse.
A consensus did emerge that more social games will target niche audiences. Panelist Atul Bagga, Vice President at ThinkEquity, commented, “So far we see horizontal applications, that is games that everybody is playing: your mom, your granny, your niece, your daughter. I think there is a lot room for vertical applications, for the smaller niche, for example, Watercooler’s Kingdoms of Camelot. It does not have huge usage, but the game kicks butt because the ARPU (average revenue per user) is very high.”
Copying is not the future of social games, unless you’re a Chinese social network
Though copying of both foreign-made and Chinese-made games is rampant in China’s social games industry today, that’s not what will drive the industry forward.
Liu Jian, chief operating officer of Oak Pacific Interactive, owners of the popular RenRen social network, stated, “Copying cannot be the future model for social game developers, unless you’re Tencent.”
That barb, rare at a Chinese conference like the recent ChinaJoy event, prompted a round of applause. The issue of copying is a common one in game industry history, with the likes of Zynga, Electronic Arts, and Activision Blizzard being blasted for it at some point or other.
Change in China’s Social Games Industry: New Entrants, Markets, and Models
China’s social games industry—the players, games, rules, and business models—is evolving at a blistering pace. China’s Top 10 Social Games and Top Social Networks, a new report by BloggerInsight, analyzes the latest changes.
Only a year ago, social games in China were developed by individuals or a small team on a shoestring budget, destined for RenRen (then Xiaonei) or other Chinese networks. Today, buoyed (and pressured) by investment (primarily foreign), developers have formed serious teams and launch their games in more lucrative markets.
China’s Top 4 Social Networks: RenRen, Kaixin001, Qzone and 51.com
Originally posted at VentureBeat
There is no single dominant network, no Facebook for all of China. The actual Facebook.com is blocked by government censors (Chinese sites all obediently and quickly remove “objectionable” content). No single social network will conquer the China market in the immediate future, least of all a foreign one. 
Instead, there is fierce competition between the top four:
- RenRen (formerly Xiaonei) copied the Facebook model: it started with students and has since opened to all.
- Kaixin001 attracted white-collar office workers by focusing on fun, addictive social games.
- Qzone gained young teens and rural users via cross-promotional traffic from QQ Messenger.
- 51.com started strong in lower tier cities, but growth has since slowed.
This post will assess market share, profile the top four, and boldly predict the future.
5 Predictions for China Social Games in 2010
The Chinese social game market is still in its infancy, but growing up fast. The first smash hits, Friends for Sale! Parking Wars, and Happy Farm are just over a year old in China. Here are 5 predictions for 2010:
1. Social Games Displace Web Games
Social games have a superior distribution model for reaching unprecedented demographics, including females and middle-aged users. These users are open to casual gaming, but unlikely to seek it out on 3rd party websites, as required by web games. Social games go viral by using existing services (social networks) and trusted references (friends). Social games are more than a fad.
Moreover, in-game social interaction has only scraped the surface. At the moment, it’s very limited: players can visit a friend’s game and leave a footprint (steal crops, play with pets, decorate a room). Once more games offer synchronous gameplay and allow friends to chat, expect social games to become more popular still. Casual web games don't connect friends in the same way.
As a result, social games enjoy unprecedented numbers of users. In China, Happy Farm has an estimated 23m daily active users across all platforms. On Facebook, FarmVille has blasted past 27m daily active users in only 6 months. Explosive growth will continue in 2010 and web games will be left in the dust.
2. Consolidation of Game Developers
The days of a few friends developing a hit from the dorm room are over. The Facebook market has already seen consolidation on a colossal scale, with huge paydays: Playfish (300m USD merger with EA), Zynga (180m USD funding), RockYou! (70m USD funding), and Playdom (43m USD funding). Production values are rising in China too, with RenRen Restaurants (copy of Playfish’s Restaurant City) and Happy Pet (copy of Playfish’s Pet Society). Developers will need more resources, serious teams and finances, to develop the next hit game.
China’s consolidation will be on a miniature scale compared to Facebook though. In fact, it has already begun: Five Minutes, developers of Happy Farm, scored 3.5m USD from Draper Fisher Jurvetson on Dec. 1. And Rekoo, developers of Sunshine Farm, received 1.5m USD from Infinity Venture Partners. China will follow Facebook developers here: expect more consolidation in 2010.
Top 10 Social Games in China
Are Chinese More Addicted than Westerners?
The Top 10 Social Games in China (a new report released by BloggerInsight) details the exploding social gaming market in China and analyzes how game companies can compete to succeed.
Parking Wars received a lot of attention for its initial success but has since been outpaced. Happy Farm hit next and still continues its mainstream popularity, now reaching 27m DAU in China and basically matching FarmVille’s 29m DAU on Facebook. China’s enthusiasm for social games at least matches and arguably exceeds that seen on Facebook.
China’s social games are similar to those on Facebook in terms of themes: the top 10 includes farming, aquarium, pet, and restaurant games. However, further analysis yields some unique characteristics in terms of the developer industry, competitiveness, and popularity.
#1 Happy Farm
It’s hard to overstate Happy Farm’s popularity. In addition to the real deal, there are countless copycats and countless games have adopted the addictive mechanics. Chinese versions are more competitive than their Western counterparts: they allow users to steal and add worms and weeds to friends’ farms.