Space Ape Games, known for mobile titles like Rival Kingdoms and Samurai Siege, isn’t afraid to mix up friendly competition with hard statistics, as evidenced by the office’s heavily modified Foosball Table. That creative drive and enthusiasm is needed for the company to thrive, especially since many expect the mobile games industry to go through a major consolidation period in the near future. The market is likely to see a large number of investments and acquisitions, making it the opportune time for Asian companies, especially large ones like the China-based Tencent, to expand globally.

[a]listdaily speaks to Simon Hade, Co-Founder and COO of Space Ape Games about the Asian (especially China’s) expansion into global markets, and what it might look like.

space ape simon hade r225xIn what ways do you think Asian mobile game companies will look to expand internationally

Generally the expansion strategy of the top Chinese games companies falls into three types: 1) Publish: bring Western content to China; 2) Partner: acquire or invest in a company that will win in the West; and 3) Beach head: establish presence in the West.

Publishing has been the main model until recently. Tencent has been making big moves in the West for a while on acquisition, including stakes in Riot, Miniclip and many others. Increasingly, Chinese player’s expectations regarding production values are approaching that of the West, while Western monetization models and genres are looking more like China. We will continue to see Chinese games companies investing in the West.

 What are some of the challenges Asian game companies face when breaking into Western markets

Mobile game companies cannot just localize language and launch their game in the West successfully. While features like Gacha [collectible characters] are becoming more widely adopted in the West, games from Asia generally do not directly translate. In order to successfully bring a game to the West, you must invest resources, which takes time and money. The companies and games that invest well will have a better chance to create a top 20 game.

There is a clear trend in China right now towards high production games. It was most important to optimize for performance, and given the large number of low spec devices in China, this meant lowering the bar for fidelity. But with companies like Xiomi and others really driving down the cost of high spec devices, player’s expectations are changing, and as a result you see the top Chinese developers capitalizing. By next year most successful mobile games will have production values on par with the West.

Is it more challenging to expand into or out from Chinese mobile game markets

Whether you’re a Western company looking to make it big in China, or a Chinese company looking to expand to Western markets, you’re going to face challenges. I can tell you as a Western game company we have a great respect for the Asian market and closely watch China for trends and learnings. The biggest challenge in China is on the technical side, trying to manage the huge range of devices, platforms, and connectivity issues for always online games.

How fast do you think Asian game companies will expand internationally

Asian game companies have already begun to expand quickly, and it’s likely we’ll see at least one Chinese game and one Chinese developer break into the top 20 in the West in 2016. While Chinese investment in Western game companies will continue to rise quickly next year, it’s unlikely we’ll see much expansion from Japanese or Korean companies in that time.

Some say that the majority of Chinese games are incompatible with Western tastes, and vice versa. What is your response to that

We’re seeing more and more Chinese game mechanics translating to the West. It’s still the case that China, Korea and Japan are each very different markets and a lot of the charts are dominated by local players addressing local tastes. However, it’s feeling more and more like the concepts that work in China are easier to adapt for the West (e.g. Game of War). One big difference is around the pace of content. Chinese players consume content very quickly, and your monetisation needs to reflect that behavior in order to make a game viable.

How do you see mobile gaming in general growing and changing in 2016

Thanks to the dominance of the RPG genre in the East in 2014-2015, we’re going to see lots of RPGs  [role-playing games] — action RPGs, turn-based RPGs, and even RPG RPGs. It will be very hard to differentiate in this genre and only those with massive, well-known IPs are likely to succeed.

This year, the rising cost of CPIs was due in large part to the big game developers, but in 2016 the rising costs will be driven at least equally by big brands moving more of their digital brand budget to channels previously owned by performance marketers. Subsequently, a majority of new entrants on the charts will be well executed games with well known IPs.

Funding for companies who have yet to establish themselves will diminish will diminish due to player’s increasing expectations for high production values and the rising cost to acquire users. Those companies are more likely to seek publishing deals or acqui-hires as they are unable to raise the capital needed to break out. This is good news for those who have already had a hit, or have the ability to acquire small studios, but bad for new startups.