A Critical Cultural History of Online Games in China,1995–2015

Industrial Structure and Creativity

Online gaming started in China, as it did in the United States and Europe, with multiuser dungeons (MUDs). Originally created in the United Kingdom by students and played free of charge, the first MUDs were noncommercial operations. When MUDs were adopted in China, they were similarly noncommercial. Immediately after the first nationwide Internet was constructed by the Chinese Academy of Science in 1995, many Chinese users were attracted to a Taiwanese user-created MUD, Eastern Story 2 (interview data with a veteran gamer). Within the next 2 years, hundreds of MUDs were created by Chinese Internet users (Anon, 2007a). One of them, Xiakexing, became the most popular online game during that time. In 1999, local Internet users advanced the genre by creating the first Chinese graphical MUD, Xiaoaojianghu zhi jingzhongbaoguo, which had 600,000 registered users and 4,000 peak concurrent users (Anon, 2007a).

The developing of these MUDs in China was a form of social production (Benkler, 2006). There were no formal, for-profit businesses to organize production, market products, distribute them to consumers, and manage game worlds. All work were carried out by users who assumed both the role of gamers and game producers. But it worked. Plenty of games were produced, they were reasonably technologically sophisticated, few complaints were voiced, usage was free, there was product development, and creativity was not constrained by commercial imperatives. Someone stole the game codes of Xiakexing and tried to operate an emulated server for profits. The developer of the game, Zhouzi Fang, reacted by releasing Xiakexing’s codes to the public and announcing that no commercial use of them is authorized (Xu, 2008). This instance demonstrated an implicit “commons-based peer production” principle in this network information economy of Chinese MUDs.

In 1998, the online casual game website “Ourgame” was established, serving free of charge as a virtual platform for several traditional chess and card games. It grew so rapidly that it became one of the largest online gaming website in the world by 2001, boasting 12 million registered users and 110,000 peak concurrent users (Ourgame, 2015). In 1999, many emulated servers of Ultima Online were set up in China. Some of them were for-profit and others were not. The noncommercial ones can be seen as user-organized online game publishing and their significance paralleled that of user-organized game development of Chinese MUDs.

The noncommercial mode of game developing and publishing ended quickly as Chinese businesspeople started to recognize the profit potential of online games. The first commercial publisher was established in 1998, and it imported the user-made graphic MUD King of Kings from Taiwan into China. It became one of the most popular games in China for a few years. Acquired by a financial investor, the Ourgame website was turned into paid service and the Ourgame team a subsidiary of a large conglomerate in 2001. The group of gamers that developed the first Chinese graphic MUD was reorganized into a game developer company by another investor (interview data with a game designer). Nonetheless, commercialization and industrial concentration only reached a low level in this period. Because the Chinese market of online games would rapidly increase for another decade before slowing down and mainstream finance capital still did not target the online game field, there were few industrial structural constraints that stopped developers from game design experimenting in this period.

Localization and Creativity

Because domestic online game companies did not yet exist, one might expect the market to be dominated by imported games during this initial phase of Chinese reception of online games. But it was not true; local user-produced MUDs attracted the majority of Chinese gamers from the very beginning. The popular game Xiakexing took only 2 months of development time and became available for play in 1996 (Anon, 2007b). It was merely several months after the first MUD (Eastern Story 2) entered China.

Although popular user-made MUDs in China adopted elements of Eastern Story 2, they also demonstrated a high level of localization. Taiwanese MUDs mostly embraced Western fantasy themes or a Dungeons and Dragons type of gameplay mechanics and then superficially dressed them up in a wuxia (martial arts heroes) guise. Chinese MUDs such as Xiakexing created original game mechanics based on wuxia lore instead. For example, while Western fantasy-based gameplay features melee, ranged, and magic occupations, Chinese wuxia-based ones adopt entirely different occupational systems such as schools of martial arts. These Chinese MUDs in effect established the wuxia genre in online games, and wuxia remains to be one of the two most popular game themes in current China.

Many business and scholarly reports hail 2005 as the groundbreaking year during which locally developed online games began to occupy more market share than imported ones (e.g., Anon, 2007c; L. C. Chen, 2009; Chung & Yuan, 2009). But this interpretation is misleading. Locally developed games already attracted a larger share of domestic users than imported ones from 1996 to 2000. Chinese user-made MUDs dominated between 1996 and 1999. Four online games and a casual game platform constituted the lion’s share of the market in 2000. They included Three Kingdoms Online, Xiaoao xianghu zhi jingzhong baoguo, King of Kings, Ultima Online in private servers, and the Ourgame platform. The first two were domestically developed and the third was developed by Taiwanese gamers. The Ourgame platform was domestically created and it featured traditional Chinese chess and games. Several imported games started to carve out a large market share in China in 2001: the Japanese game Stone Age Online, South Korean (thereafter Korean) games Legend of Mir 2 and A Thousand Years, and the Taiwanese JinYong Qunxiazhuan Online. It was estimated that 20% of the market share of commercial online games (excluding noncommercial emulated servers, such as those of Ultima Online) was taken by Japanese products, 30% by Korean products, 8% by Taiwanese products, and 40% by local Chinese products (Anon, 2007a). A large part of this 40% came from the Ourgame platform, however, which featured multiplayer casual online games rather than massively multiplayer online games (MMOGs). There were around 10 domestically produced games published in the Chinese market in 2001, representing approximately 40% of all titles published in China. One of them was Westward Journey Online, the sequels of which subsequently became the longest-term hits in the Chinese market.

Although 2001 became the first year that domestically produced games gained a lower market share than imported ones, the market share of China-produced games remained higher than those of games from any single country in that year. The popular current view that valorizes large Chinese game corporations and/or the Chinese state as heroes that liberated the Chinese market from foreign domination in 2005 is disingenuous (e.g., Anon, 2010a; Tai, 2010). The user developers of MUD, noncommercial game servers, and noncommercial game developer teams that were active between 1996 and 1999 were forgotten or even demonized in business discourses. Noncommercial servers, often accused of being the precursor to illegal emulated servers, are especially detested by the present Chinese games industry because they undermine corporate profits (Chew, 2011a; Ding 2010; Sishier, 2014). This selective forgetting parallels how hackers were purposefully left out in business-oriented accounts of the history of the Internet.

Industrial Structure and Creativity

Korean games occupied a larger share of the Chinese market between 2002 and 2004 than games from any other country. This period is often interpreted in the following way (e.g., L. C. Chen, 2009). The nascent Chinese online games industry in the early 2000s was incapable of producing sophisticated and creative titles such as those found in Korea or the West. Hence, a global supply chain was set up, under which Korean and Western corporations supplied innovative products, while Chinese firms focused on noncreative tasks such as game publishing and outsourced game animation. Occupation of the Chinese market by domestically produced games after 2004 is taken to demonstrate that the capital and expertise accumulated through previous noncreative work have finally allowed Chinese firms to develop sufficiently good quality games that captured domestic consumers. While this reading is not completely wrong, it leaves out important details.

The most successful Korean game in China in the period, Mir 2, was by no means recognized as a high-quality title in Korea or in China. Experienced gamers and commentators generally regarded it as a mediocre game because it lacked graphical, technological, and gameplay innovation. An example of a high-quality Korean game from the period was Lineage, which was not popular in China. Shanda, the Chinese publisher of Mir 2, picked a mediocre game to publish for its low licensing costs and ease of game content localization. The commercial success of Mir 2 in China did not exactly reflect the triumph of game design creativity; it was instead achieved mainly through Shanda’s effective marketing strategies (Liu, 2002). There were two mutually complementing aspects in Shanda’s marketing strategies: marketing online games in mid-sized cities and rural towns in addition to globalized coastal regions and adopting labor-intensive person-to-person promotion campaigns that target cybercafe users. Netizens located in these cities at that time had little experience with online games and therefore represented a huge, unexploited, and uninformed mass of potential gamers. A high-level manager explained that “these marketing strategies were eagerly adopted by the majority of large Chinese publishers between 2006 and 2009” (formal interview).

Although corporatization barely began and industrial structure was not sufficiently concentrated to seriously constrict creativity, creativity was disincentivized by Shanda’s marketing-oriented business model. The initial public offering of Shanda in National Association of Securities Dealers Automated Quotations (NASDAQ) in 2004, the first instance of a Chinese online game company going public overseas, sent a strong signal to Chinese investors and game companies that prioritizing marketing over delivering creative content to users was the superior business strategy. A game designer complained that beginning from around 2005, “game development personnel who seek to produce high-quality game contents would often be ridiculed. They were criticize as ‘impractical’ and/or ‘non-business-savvy’ by the management and investors” (formal interview).

Several other designers and managers express similar thoughts in my formal and informal interviews.

The market concentration of publishers was high in the period—it was more concentrated then than any other previous period because of the rapid rise of a few game corporations. As Table 1 shows, the concentration ratio of top three publishers rose from 62% to 75% and that of the top five publishers increased from 65% to 81%. Additionally, much of the market share of three top publishers came from a single or a few cashcow titles. This period left room for creativity despite high concentration ratios, however. Not all large game corporations in the period adopted a marketing-oriented business model. The second most commercially successful publisher at the time, Netease, relied on a combination of marketing and game content localization strategies to attract gamers. The third most commercially successful game publisher, The9, adopted the more globally familiar business strategy of branding through publishing high-quality games. Moreover, corporatization was limited and the market was expanding. Chinese investors who operated outside the information technology sector did not recognize the commercial potential of online games yet—not until it was announced in Chinese Forbes in 2004 that four of the top ten wealthiest individuals in China earned their riches through online game businesses. The owner of a small developer recalls that “the overhead of developing an online game at the time, which was less than a million RMB (around 160,000 USD), was still low enough for many startups to manage” (formal interview).

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Table 1.

Market Concentration Ratio of Top Three and Top Five Game Publishers, 2003–2005.^a

Concentration ratio	2003 (%)	2004 (%)	2005 (%)
Concentration ratio of top three game publishers	62	63	75
Concentration ratio of top five game publishers	65	73	81

^aConcentration ratio (CR) values calculated from IResearch (2004b, 2005, 2006).

Table 2 illustrates the exceptional rate of growth of the industry. Around dozen of the online games published in China in 2001 were developed by Chinese firms (formal interview). The number was similar in 2003. But it climbed to 51 games published in 2004 and then to 192 games developed in 2005. The number of developers rose sharply from 44 in 2002 to 120 in 2005. It was remarkable that publishers, which required even larger overhead investment than developers, also grew drastically from 18 in 2002 to 77 to 2004. The number of individuals working in the industry increased greatly between 2003 and 2005. There was room in this rapidly growing environment for game developers to try something creative and novel.

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Table 2.

Growth of the Chinese Online Games Industry, 2002–2005.^a

Year	Developers	Publishers	Personnel (Developers)	Personnel (Total)	Games (Published/Developed)
2002	44	18	na	na	na
2003	41	103	2,065	7,553	18/na
2004	104	116	5,000	8,000	51/109
2005	134	97	12,455	13,000	na/192

Note. na = not available. ^aData sources: IResearch (2004a, 2004b, 2005, 2006) and Popsoft (2004, 2005, 2006).

An example of small developers that began from scratch and then made it big in the period was Snail Games. The company’s signature title, Age of Sailing, was the second runner-up in the Chinese Creative Games Awards of 2004, beating Shanda’s games and other much more commercially successful ones. This game even managed to enter the Korean market, challenging the one-way flow of game cultural influence from Korea to China. Another notable Chinese developer was Kingsoft. Previously, a small company producing video games, they turned into an online game company that developed widely acclaimed titles including the Jianxia Qingyuan Online series. The three titles in the series are often cited by veteran gamers and industry insiders as the highest quality massively multiplayer online role-playing games (MMORPGs) that China has ever produced. Although they were not the most profitable games in the domestic market, Jianxia Qingyuan Online gained great commercial success in Vietnam in 2004 and it opened up the first massive export destination for Chinese games (formal interview with the top management of a Vietnamese publisher).

Localization and Creativity

Because this period is the only one during which China-developed online games did not dominate the market, one may assume cultural localization in the period to be less remarkable than others. This assumption is not necessarily correct. Chinese developers’ localization efforts were indeed limited in the period, but localization by Chinese gamers was notable. Mir 2, the most popular game in 2002 and 2003, featured a semisandbox design in which gamers were not required to complete many particular events, instances, or player versus player (PVP) achievements before they can progress. This provided a fertile background within which emergent play practices of Chinese gamers coagulated into localized patterns. A major localization direction was the emphasis on collective player killing. Formation of longstanding rivalries and mobilization for large-scale conflicts became major preoccupations of Chinese Mir 2 gamers. Realm versus realm PVP never gained popularity in the Western online game market.

A similarly powerful yet substantially different direction of localization concerns the “real money trading” (RMT) of virtual in-game items. RMT did not emerge in China earlier than the United States or Korea, but the seriousness with which Chinese gamers engaged in RMT activities was exceptional. Because average wages in China were much lower than those of other major markets of online games at the time, farming in-game items for RMT profits was far more attractive to the average Chinese gamer than Korean or Western ones. Many Chinese gamers spent time farming virtual items in Mir 2 and the first commercialized gold farms in China were born from this game world. In the following few years, an enormous virtual gold farming industry arose in China and it has since dominated the world market in commercial RMT (Heeks, 2008). Chinese World of Warcraft, which entered China in 2005, was also localized by Chinese gamers in the direction of gold farming for RMT. For example, instead of playing with a stable group of gamers in a guild to beat dungeon bosses and acquiring boss drops through dragon kill points, many Chinese World of Warcraft gamers join ad-hoc “gold run groups” (jintuan) in which drops were sold to bidders within the group for real money.

The case of Chinese Audition Online illustrates yet another entirely different direction of game cultural localization in China. Featuring Japanese style animation avatars with cute faces and large eyes, pop chart music, and hip colorful clothing, the game was originally intended by Chinese publishers to be a dancing game for young children (informal interview with the project manager of Chinese Audition Online). It was among the first batch of online games granted the official status of “Online Game Suitable for Under-Aged Groups” by the Culture Bureau of China. Ironically, Audition Online was turned into a sex and dating social network platform for Chinese adolescents immediately after it was published in 2005 in China. Youngsters and especially young girls loved to play the game in order to meet dates. To the Chinese public, the game was known as a hotbed of promiscuity, one-night stands, online predators, and short-term romantic affairs. Because of the popularity of Chinese Audition Online, a host of local clones, including QQ Audition, was developed and a localized genre of online games was thus established.

Localization and Creativity

There were some interesting game design features in domestically produced titles that reflected developer-led localization between 2002 and 2005. Jianxia Qingyuan Online II advanced and expanded the thematic boundaries of the wuxia genre. Perfect World was a largely graphically and technically achieved localized version of World of Warcraft. Westward Journey II and Fantasy Westward Journey departed from Western fantasy MMOGs on the one hand and wuxia MMOGs on the other through combining Japanese animation style, Chinese fantasy lore, and a relaxed style of gameplay that emphasized gamer socializing. Developer-led localization found between 2006 and 2009 surpassed these previous examples in both magnitude and significance. My argument—which is an unexplored and controversial one—is that developer-led localization in the period generated a business model, a payment method, and a game design approach. Together, they have introduced a new and dark chapter in the global history of online games. It has fundamentally transformed the Chinese online games industry and is profoundly influencing that in the West.

This distinctive business model and game design approach have never been clearly identified or systematically analyzed by scholars. Full explication of them cannot be done in this study, although I discuss its implication for creativity. The business model may be called a “virtual item and service retailer” model, the payment method is referred to by the global industry as “free-to-play” or “microtransaction” one, and the game design can be described as “pay-to-win.” This business model re-positions online game developers and publishers as retailers of virtual goods and services for gamers. Payment is nominally free because gamers are not required to pay before they can log on and play in game worlds. The business model and payment method encourage the impression that gamers are mainly paying for in-game items and services rather than developers’ work of designing, maintaining, and governing of game worlds. How gamers assess their payment’s worth is hence shifted from how good a game is designed to how functionally powerful, status enhancing, or aesthetically pleasing the virtual items and services they purchased are. This is a subtle difference that can yield practical consequences.

This business model, payment method, and design approach were not exactly invented in China. Different games developed in Korea and the United States had adopted individual elements of them (Davidovici-Nora, 2013). Yet, they were finely tweaked, pushed to their limits, and most importantly complemented by new game design details that effectively operationalize the model in practice. It seems counterintuitive that game design can adopt a pay-to-win approach. Chess would become pay-to-win if there were for example paid services offered by a third party to replenish captured pieces for a paying player. Would anyone consider pay-to-win chess a fun or good game? It is theoretically difficult to make a pay-to-win game attractive to users, if it is possible at all (Hsu, 2013).

A game published in 2006, Zhengtu Online (ZTO), illustrated to the world how to do it and how much more money a workable pay-to-win MMOG can earn than a subscription-based one. A two-dimensional, low-tech game set in a generic Chinese historical background, ZTO’s attraction to gamers did not exactly lie in graphics, theme, or game mechanics. The owner of a small publisher recollected that “industry insiders and veteran gamers generally thought at ZTO’s launch that the game was a run-of-the mill title that would soon go broke” (formal interview). Little did they know that the locally invented features contained in the game would eventually lead the startup to prosper in China and to get listed on NASDAQ. Numerous Chinese game developers researched the game content of ZTO and imitated its lucrative design features immediately after ZTO’s success (S. Chen, 2007).

A host of China-invented game features operationalized the pay-to-win design approach model in China. I briefly describe one of them, the “treasure chest” (kaibaoxiang) design approach, to illustrate their ambivalent implications for creativity. It was estimated that at least one third of ZTO’s revenue in early 2007 were derived from the game’s treasure chest feature (S. Chen, 2007). In MMOGs with the treasure chest approach, gamers acquire desirable virtual items exclusively through buying treasure chests from item shops and opening them. This design approach drastically deviates from the conventional MMORPG one of letting gamers acquire powerful equipment mainly through in-game efforts such as downing bosses or winning PVP fights. The treasure chest approach is relatively fun nonetheless. It creates excitement by introducing gambling elements into chest-opening processes. For example, elite drops from chests are made rare and probabilistic. Many variants of treasure chests have been developed. The lucky wheel is one of them. Kompu gacha, a gambling-like game mechanic featured in many Japanese social games and eventually legally banned, can be seen as a descendent of the treasure chest.

Business discourses often praise the late 2000s generation of Chinese MMOGs for their originality and indigenousness (e.g., Anon, 2007d; Hu & Sørensen, 2011). Game features such as the treasure box may be labeled creative in the sense that they supply an original way to maximize game revenue and a clever solution to ameliorate the negative gameplay impacts of pay-to-win designs. Yet these game features could readily be interpreted in negative terms. They encourage game designers to substitute substantive game content with gambling devices and gamers to gain in-game achievements through real world wealth instead of in-game efforts (Luo, 2008). How to accurately evaluate these game features will be a complex and intriguing topic for future research. A tentative assessment that can be made here is that they are commercially innovative but not game culturally creative.

The huge commercial success of Chinese game corporations adopting the new business model, payment method, and game design approach is compelling global game corporations to adopt them. The microtransaction payment method has by now become regarded as the mainstream among U.S. game publishers, for example (Fleming, 2013). The Chinese business model and game design approach are not easily transferable to Western contexts, however. Global and Chinese companies have tried implementing pay-to-win designs to online games for Western markets with uneven results. Western gamers disparagingly call pay-to-win games “Asian games” to stigmatize them. Western game corporations are nonetheless pressing their designers to localize this contra-flow of game cultural influence from China. Even Blizzard, the most critically acclaimed among global game developers, has implemented item shops in Wold of Warcraft and an item trade commission system in Diablo 3.

Industrial Structure and Creativity

There were two notable trends in this period regarding industrial structural change. The first is the easing of market concentration in game publishing. CR3 dropped from 74% in 2005 to 58% in 2006 and that of CR5 from 81% to 74%. CR3 has stayed around 60% since 2006. CR5 never returned to the 80s. A few kinds of game companies contributed to this easing. They were established portals that began to enter the games market as publishers, startup game companies with popular pay-to-win MMORPGs, and others (including Tencent and 9You) that entered the market with free-to-play casual games. Several major corporations and several second-tier corporations shared the publishing market in the following few years. The first and second positions were occupied by Shanda and Netease, while other positions frequently changed hands because many companies relied on a single cashcow title.

The less-concentrated market structure was partly caused by the meteoric rise of the virtual item retailer business model, free-to-play payment method, and pay-to-win game designs. The invention of these new, very different, and heavily localized online games could be interpreted in positive terms: They contributed to game cultural pluralism in the global context. Moreover, despite the negative game cultural implications of pay-to-win designs, their rise transformed the game design environment toward a positive direction over the period. The marketing-oriented strategy and labor-intensive marketing of games in cybercafes still continued after 2006, but corporations valued these marketing methods less because their attention have shifted to creating effective game designs that can operationalize pay-to-win.

The second trend of the period was extensive corporatization. Four game companies that began as developers managed to offer initial public offerings in 2007 in the United States or Hong Kong, and the game development unit of a major Chinese portal website did so in 2009. With large pools of newly acquired capital, these corporations and other major Chinese publishers aggressively built in-house developer departments and acquired up-and-coming independent developers. A high-level manager of a big publisher admitted in an interview that “these acquisitions of independent developers were not always done for enhancing the corporations’ creative work force” (formal interview). They were instead often done for preventing independents from growing into formidable rivals or being acquired by competing corporations (Wang, 2010). The listed corporations also spent much resources hiring talented creative workers with a proven record, usually by snatching them from another company. These corporate actions impacted negatively on creativity.

The project manager of a large game publisher claimed that “the minimal overhead of developing an MMOG in 2009 increased around tenfold compared to 2004” (formal interview). This greatly limited the survival prospects of independent developers and startups. Their production budget could no longer depend primarily on noninstitutional private investors as in previous periods. Moreover, they could no longer find shelter in regional local markets because large game corporations’ reach became effectively national in regard to marketing, acquisition, and creative worker hiring. Consequently, no startups managed to grow into a decent-sized independent game company between 2006 and early 2009. The market of publishing became less concentrated since 2006. Although no quantitative data were available on game developers’ market concentration, developers’ market concentration did not actually go down. The owner of a large game media explained that “a large share of game developing was carried out [in the late 2000s] by in-house developer departments of large corporations” (formal interview). And a senior game designer complained, “in in-house units such as those of Tencent and Perfect World, the management cautiously control the production process and suppress design innovation” (formal interview).

Localization and Creativity

The free-to-play payment method, pay-to-win design approach, and virtual items retailer model became established as the business standard in current China. For instance, only 2 of the top 50 online games on the market in 2012 adopted a purely subscription-based payment method. Much developer-led and gamer-led localization continued to emerge between 2009 and the present within the parameters of pay-to-win designs. But there were also new directions in the cultural localization of online games in China since 2009. These new directions have been made possible initially by the extension of MMOGs to the browser game format. The advent of browser games in China began approximately a year earlier than that in the United States. Browser games already arose as a powerful force in the Chinese market in 2008 and they became highly developed in 2009. In 2010, MMOGs also moved to the mobile phone format and became highly profitable in China. The market revenue of browser games and mobile online games are still growing now and they grow at a much faster rate than that of client-based online games (CNNIC 2014; iResearch 2014).

Browser games were by no means invented in China or only popular in China; they were played by numerous global gamers on Facebook for example. But Chinese gamers embraced browser games very enthusiastically and Chinese developers created locally distinctive subgenres of browser games. The first notable China-invented genre was farming-themed causal games. Integrating existing features from children games and casual games, Chinese developers create the farming game Kaixin Nongchang. The game became a big hit in 2008 and 2009 and propelled a new social network service (SNS) platform to mainstream status. It inspired a very similar game that sustained another big SNS platform in China. Most interestingly, it inspired overseas versions—such as Zygna’s Farmville—that occupied the top ranks of Facebook and Japanese SNSs for a long time.

The second was local browser MMOGs. These games were not imitations of globally popular browser MMOGs such as Travian or browser MMORPGs such as Runescape 2. Similar to Chinese client-based online games, their thematic backgrounds are wuxia and historical military settings. Most importantly, they contain newly invented mechanisms and features. For example, the influential game Aoshidiandi elevated the element of luck to an unprecedentedly important level in numerous aspects of gameplay. Browser MMOGs were welcomed in China partly because the computers on which many Chinese gamers play games are old or built with subpar specifications. Their low technical requirements encouraged another huge group of causal gamers: low and middle level office workers who play during work hours. Chinese browser MMOGs were designed as casual games rather than conventional MMORPGs, with less stress on game immersion and interaction with virtual world environments.

Aside from offering local features tailor made for the Chinese market, a new way through which Chinese games contributed to game cultural pluralization in the world became possible in this period: hybridization of local and global cultural elements in China-developed games that aim at overseas markets. Since 2009, Chinese game companies pay attention to global markets as expansion rates of the domestic market slowed down and as they acquired much capital from Initial public offerings (IPOs). Nonetheless, my interview with a top-level manager of the most successful Chinese game exporter confessed that “expansion into Western markets is perceived by most Chinese game industry leaders including us to be a very long shot” (formal interview). This attitude explains why Chinese developers still have not put much effort into re-designing game content specifically for Western markets. Consequently, the majority of China-developed online games that were published in the West contained unadorned pay-to-win features that many Western gamers find unpalatable. Chinese online games were indeed well received in several Southeast Asian countries, but it was not because they were meticulously redesigned for Southeast Asian tastes. Instead, they thrive in the context of Southeast Asian gamers’ prior familiarity with Chinese wuxia novels, television drama, and film.

Heroes of Might and Magic Online (by TQ Digital Entertainment) represented a typical example of Chinese pay-to-win games that failed in the Western market. Many Western gamers were perplexed by the game’s “extremely and unnecessarily repetitive gameplay” (data from game forum). They did not understand that extreme repetitiveness was a common part of Chinese pay-to-win games. It was a design feature that pressures gamers to regularly purchase automated services offered in the item shop. Evony represented an example of a successfully globalized Chinese pay-to-win game. The two games of this series became two of the most popular browser MMOGs in the United States in 2009 and 2010. Its pay-to-win characteristics were toned down and its Chinese origin was carefully covered up. Nonetheless, it still kept typical Chinese browser game features including blatant copycatting of currently popular games and the notorious marketing tactic of relying on pornographic ads to attract gamers (Johnson, 2009). The hybridization of Chinese pay-to-win elements in games for the Western market is still ongoing, while its implications for game creativity are ambivalent.

Industrial Structure and Creativity

There were two powerful yet conflicting trends in the industrial structure of the period. The first was the successful rise of a new group of game developers and publishers. This was made possible by a disintermediation of the games industry’s value chain (as exemplified by Apple’s apps store model) and the corresponding commercial viability of small developers (Cunningham, 2012; Rayna & Striukova, 2014). The impact of this paradigm shift was global. It empowered small developers not only in the West, but those in China as they could directly supply to the global market of mobile games (Huxiu, 2012).

Another cause of the first trend was specific to China. Immediately before the advent of the apps store and mobile games in the global context, the rise of browser games actually brought about industrial structural transformations in China that were similar to what the Apple apps store model subsequently brought to the world. The costs of developing and publishing browser games were much lower than client-based online games (Guo, 2010), and the browser games market was initially free from oligopolistic control of established game corporations. Startup developers of browser games were able to produced influential and creative titles such as Kaixin Nongchang and Aoshitiandi with a small overhead and without corporate constraints. Some reaped enormous profits from these titles. They managed to compete with established publisher corporations by realizing first mover advantages in the new market of browser games. The owner of a startup publisher of browser games explained where these startups came from.

Some of them grew through providing casual social games on SNS platforms. Others were originally networks of small internet advertisers that were attracted to game publishing via their deep involvement in advertising browser games for startup developers. (formal interview)

Tencent’s success did not encourage creativity. A browser game developer complained that “any half-decent game published through Tencent can become commercially successful” (formal interview). Interestingly, the top management of Tencent admitted that this was true and was rather proud of it (Shi, 2008). Browser game developers were therefore increasingly and indirectly pressured to conform to pay-to-win designs. For example, the youthful development team of Aoshitiandi promised gamers in 2010 that their game will never adopt widely used pay-to-win features such as “the gemstone system.” Aoshitiandi indeed required significant less cost to play than the average browser game. But many clones of Aoshitiandi were developed and published through Tencent and other large browser game platforms. The clones copied Aoshitiandi’s innovative gameplay mechanics but did not shy away from adopting flagrant pay-to-win features to maximize revenue. Most of the clones were profit though all of them had much shorter lifespans than the original. Under these circumstances, the developers of Aoshitiandi eventually went with the trend and implemented a gemstone system in their game in 2012. Mobile game developers are to a lesser extent facing similar pressures since 2014 because Tencent’s apps platform has also become increasingly influential.