💰 Mini-Games = Mega Revenue: Inside China’s gaming revolution

So, the Crash Road minigame is actually, I think, still at an early stage compared with Going

in 2023.

What am I watching?

Looking at

is this a UA creative, or what is it?

It's something perfectly accurate, it's it's uh one of the hottest memes, yeah, meme.

And

yeah, that's the Italian brain rod one, yeah.

And a lot of people they made this video into the mini game.

Jackups crafting realms left us to the highs.

Two and a half gamers talking smack.

Slow, hockey, sick, got your back.

Ads are beautiful, they like the way.

Click it fast, don't delay.

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Hello, everybody.

Hello, hello, hello.

This is two and a half gamers.

Another special episode.

We only have special episodes so far, so we continue with this.

My name is Matthiel Anchar.

I'm Felix Broberg.

We are your hosts, and we have a special guest.

Hello, can you introduce yourself?

This is Chen Yang from Cocos.

I had been a developer for more than 10 years and also a publisher for about five years.

Now I'm doing ecosystem operation in Cocos.

Nice.

Well, and today we're gonna talk about minigames in China because this topic is full of insights and this is exactly what we're gonna dive into today.

So, back up.

This is gonna be very interesting.

I can't wait.

Okay, let's begin.

So first, let's let's let me introduce something about the Coco.

So Coco currently is the largest cross-platform and open source 3D engine in China.

Currently, we have probably like 1.7 million

developers using the Cookus.

Probably 40% of them outside China.

Most from the United States and Canada, some from the Indian and the European countries.

So our device coverage has been more than

2.1 billion and about uh

54 percentage of the mini game in china are made with coconut creator and also about 20 percent of the android game are using cocoos as well that 20 android means android games in china or android overall

oh hello hello there i didn't see you Thank you very much for coming to this episode.

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Most like worldwidely, because I count the Cocos 2DX as well.

So you can say there's a lot of classic games like the Legend of the Mushroom, the Copper,

also the Street Fighter, the King of Fighter, the Clash of Kings.

Like all of those games are made with Coco Creature.

Of course.

Yeah, the Sheep Shape.

The most well-known casual game.

Yeah.

So first, I'll introduce the marketing trends for the minigame in China.

We have seen the minigame industry in China has reached about 5.6 billion US dollars in 2024.

So it has a potential to break to 6.5 billion US dollars in 2025.

So in this industry, of course, I contribute more than 55% of the minigame to this industry in China.

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We can also say, due to the decline of the world economy, all the global mobile games actually is declining this year and also affects the China mobile game.

China mini-game is growing really rapidly from 2021 to 2022.

And also,

there's a big step from 0.7 billion US dollars to 2.8 billion US dollars.

I'll introduce in this page.

So

there are two reasons why

China mini-game is growing so rapidly from 2022 to 2023.

The first reason is

because of the IP.

So we can say most of the revenue actually from the IP instead of the IAA.

The IA in 2022 is about

60,

about

61.2%

of all the revenue, but it's declining to only 31.3%.

So which means most of the revenue is actually from IEP instead of the IAA.

And so the IA represents many opportunities in future because it doesn't require an ISBN.

And another thing, I think for this year, the ECPM, all the revenue from the IA is growing really fast because we see a little signal, the economy is getting better in 2024.

So if the ECPM is getting better, if there are more advisors, the IA will take more share in the future.

Yeah, just a little bit wait there, like just so we understand because some people don't not familiar with this.

So games that are running only on ads without in-up purchases don't require pretty much government approval.

That's the ISBN number.

So you can release them freely and don't need to wait.

And there's still like a big, uh, big problem for current games to be released if you they have enough purchases, yeah.

So, there are two different ISBN.

So, the first one is for the casual game.

Currently, for the casual game, Ice BN, the usually

like the time for the delivery is roughly about five months.

But if it's a hardcore game, something like an ARPG or the SRG, the 4X game, it usually takes more than one year for the hardcore game.

But for the casual game,

Yeah, there's two different camps,

which is guaranteed you will get an approval, right?

Yes.

Yeah.

If it's a come, if it's a game from outside China, the average time may be one and a half years for the overseas game.

So we can see the market, but it's already, I'll say, the We Chai minigame, probably the biggest fish in the market, and followed by the Do Ying, the OEM, the manufacturer, minigame installed, and followed by the RDP, the Kuai Show, and the Mei Chuan, and then the others.

So, why China minigame really huge?

Since China has like 1.4 billion population, so which include nearly 600 million monthly active

minigame users.

So, that is really huge.

So, it's creating amazing single market opportunity.

So, for example, like Doin and Ripay may have probably about

each of them probably has like 800 to 900 median MAU for each application.

So the MAU is actually bigger than the population of some small countries.

Just for people to know, Doin is the Chinese version of

Doing is a Chinese version TikTok.

And unlike like many regions, China's Android ecosystem, like the Google Playface, so allowing the developer to keep the haggard revenue from the super application.

And on another thing, we have the probably the world-leading mobile payment system like the WeChi Pay, the RDP.

It also drives strong user spending and seamless monetization, which means you don't have to use the Apple Pay.

You don't have to use the, sorry, you probably you need to use the iOS pay since they have the agreement with iOS.

You still currently for the Doeing and for RPAY and for WeChat, like for most of the game, you still have to pay the Apple Pay.

But for Android, totally like no Google Play Fay at the moment.

Pretty much like all IP purchases are direct to consumer, you mean?

Yeah, but not really.

It's depending on the game.

Depending on two conditions, it's IP or IA.

If you buy the tri-faith from

application, if you buy the tri-fair from application, you can get more, probably like a percentage of the revenue from the application

on the consumer side.

So it's a little bit complicated.

So it's roughly like 50 to 50.

You get a 50 percentage of revenue from the super application or the manufacturer.

Yeah.

So if I let's say if I pay like $100 in whiteout survival on WeChat, Century Games get 50%?

Yeah.

But if you buy, but if the user is from the traffic you buy, probably you get a 70 or more.

So this is is some data from Cogos.

We can see like in China, in China, more developers actually building the minigame.

Like it's more than the combination of the Android plus the LIs.

And uh we can see the minigame currently representing like more than half our build distribution.

In this data is from August and September.

So it's demonstrating like significant market validation, like more people they are building the mini game.

So that's probably why they don't want to publish their games in like outside China, especially for the minigame, because there are tons of the super education like Doing, RP, Nei Tuan, and Kuaishu.

And in this year,

there will be a super education like decide they will go for the mini game market like every quarter.

For example, like

we get the Miguel game, and we also have a lot of rumors and more and more super applications they will open their mini game centers in this year.

So this is something different like

between China and global.

So first for the traffic, most of the traffic in China actually from the social application and the APP style.

We can see this is OEM APP style from Huawei and also the long tail traffic.

But outside China, actually most of the traffic is from the long tail traffic.

So this is OEM style.

Like in Euro, we can see a small minigame icon.

It's probably something like Poké or Crazy Game.

And for the monitoring, as I introduced before, probably almost 70% of the revenue is from the IEP

and the rest from the IAA.

But for the global market, I think more than 90% of the revenue is from the IAA.

For the platform, they're using a technique we call the runtime.

It's an SDK to allow the mini-game to run with the hacker performance and with the hacker security levels.

But for the global, I think most of the platform is using the H5, which is what we audit.

For the content, I think most of the Chinese, I would say it should be SLG, MMO, or the Ido game.

But for the global, most of the games are casual or hyper-cachio.

For the developer, I think most of the games that really make money are made by the major company.

But for the global, most are the indie or the small teams.

Yeah, yeah, let's go.

One slide.

So, if you say global, what do you mean as for like which store?

How should I define that?

The difference between global and China?

I prefer probably the Poké, the creative game, the Yandex store, also the game distribution.

So, like other mini games plus

China.

Exactly.

Yeah, which we all know.

Hyper casual hypercasual versus the actual Forex and like the heavyweight

games.

Facebook instant game.

Yeah.

So, this, so this is something a a little bit different about the technique.

So the mini game runtime is actually SDK.

So it's providing a sandbox for the script and another window for the rendering.

It's providing something like for the higher performance and the high coverage and also the low cost.

So what's the most important Chinese super

application they're using the runtime is about the control.

So using the runtime to control the payment to avoid the mini-game.

Sometimes in the web view, they may cut the payment, they may cut the IDs, they may replay the payment with their owns, they may replay the advertisement with their own ID.

So that's one of the biggest reason.

Another big reason is they're cooperating with Google and they're cooperating with Unity.

So they're providing some engine features in the runtime as well, providing a much higher performance.

And this is something that major platforms in China and global.

First, I'll talk about the OEM, the manufacturer.

The first one is Huawei.

They have two stalls.

The first one is for their Android style, the Huawei Android phone.

Another one is for the Harmony OS, their newest operating system.

So it's growing really rapidly.

So followed by the Opal and the Waywall mini game stall, then followed by the Mi and the owner.

It's a new OEM stall last year.

And then followed by the social application.

I want to to mention something about the QQ.

Do we know the QQ actually closed their own minigame in May this year?

So all the QQ mini games are replaced with the Weichai minigame.

So the Tencent just maintained one ecosystem this year.

There's no more QQ.

So followed by the Do Ying, the Taobao.

Taobao is a shopping, the biggest shopping application in China.

Then the Alipay, the Meituan, it's a lifestyle application by the Kuai Shou, which is a Chinese version of the KY.

Then we have the Miguel last year.

Miguel is the application from the China

Telecom.

So it's the biggest telecom company company in China.

But for the global applications, we also see like Index has their own application with like a millions of users already, then followed by TikTok.

We all had a rumor that TikTok will have their minigame center soon, probably probably by the end of this year, and Discall followed by the YouTube.

I think this should be probably be the Google minigame, since Google already tests their mini game in Google Play already, but there are no monetization yet.

Then followed by the Telegram.

Telegram is a mix of the Web3 and Web2 by the Yandex, also by the KY game.

Yeah.

For the H5 website, as I introduced before, we have the Poké, the create game, and game distribution followed by the game snacks.

So we can see that outside China, all the global application and all the all the H5 website, they are using the web wheel instead of the runtime.

So probably for two reasons.

First, they need to share the revenue with Google and with the iOS.

See, they need to let the manufacturer know what exactly happened inside their application.

So web wheel will be clear to the manufacturer.

If you're using the sandbox, they don't know what script you're using, like inside the sandbox.

So it's dangerous for Google Play and the LIs.

If you're using the sandbox for LIs, you probably you couldn't get your application at least in VICE.

It's very high.

By the way, can you can you just roughly say if you go to China, like the main stores they're like was the percentage share of the market?

Like which each one is just like you were there already, like I mean like in the

uh so yeah, I I like to say the biggest, probably 80% of the revenue is from the WeChai, followed by the Do Ying, which is TikTok China, then followed by the Alipay and the Kuai Show, which is Kawai China, then probably by the Meituan, it's a lifestyle application, then probably Taobao and Miguel star is.

So which is 80% still?

The WeChai is a lot

80%.

Then followed by the Do Ying and OEM source.

And which of these these UA networks are the largest in China?

Like where do you buy the users?

It's quite complicated.

It's quite interesting.

First,

I think for the UA, probably 60%

from the WeChai, which is Tencent AD system, arrives from the OSHIN, the Ocean Engine.

The Ocean Engine is owned by Do Ying, which means actually you can buy the WeChai minigame traffic from Doing system as well.

But Do Ying, they gave a lot of benefit for their traffic loop.

If you're buying the traffic from Ocean Engine to Doing minigame, you get more benefit.

So, they for the last year, like most of the Ocean Engine traffic UA for minigame is actually leading to WeChai, but for this year, I think more haggard and haggard percentage is

in the Doeing systems loop.

They don't want the UA outside the Doing system.

Interesting.

But introducing later in the Doing section.

Okay.

So uh I'll talking about the ecosystem chain.

So first I'm talking about the IAP.

So these are two liter balls.

So the first one is for the IP game, the second one is for the IA game.

It's quite interesting.

We can say like most of the revenue is from the IAP.

And in this year, I like to say more than seventy percentage of revenue would comes from the IP.

And we also have a data that shows which high minigame has the largest developer or the user base right now.

And on the other hand, probably most developers only publish IA games only.

So which indicates two things.

So most of the developers only build IA, but most of the revenue is actually from the IAP.

That makes sense.

And another thing is like the mini-game IP revenue is actually into the APP game income.

So which means the minigame revenue in the IP is going really, will glowing slowly in the next five years because it's already reached a limit.

It ate most of the consumer cost on the IP from the APP game.

So, that's why it's really growing so rapidly these two years, because WeChai providing a really good ecosystem for the users and developers.

For the top game, WeChat heard, the retention is almost as the same as the APB game in the WeChat.

So can we go back there once again?

So this is about the attachment and also the gameplay from the Three Kingdoms.

So I'll say the most representative game, probably the S-World Three Kingdom, has been one of this year's

longest running top-grossing mini-game.

So

beyond the end of this winter, I'll say probably the White White Night, like in the

titles, are entering the WeChat's revenue charts.

And many games are either Clan War gameplay later or the SRG like.

Since SRG is often

deliver the highest long-term LT weight.

There are a lot of games they are adding the Clan War, they are adding the SRG playmaster at the very end of the game to improve the long LTW for their games.

Yeah, so this is still Forex where River Game is competing with Century Games.

Yep.

So give me a second.

So I'll talk about the TikTok.

So TikTok revenue is really surging this year because most of the revenue comes from the IP now.

It's for two reasons.

So first we are focusing in the IP game, giving the more placement and more entry port for the minigame and the IPs.

They're aiding the code stop, the coding starts and the retention.

Because for the last year, the retention for the IP is really bad in the TikTok, which is

probably

only 50%

of the WeChai retention compared with the WeChat.

And another way, as I mentioned before, they improved the Buy AD system, which is the Ocean Engine.

They gave the better optimation, they gave the better

IP support and the AD payouts for the IP game.

So we can say like most of the games in the top 50 revenue chart on the Doin or Cloud with WeChai.

So there's another thing.

Doing also have the QR rewarding task.

So it's a key part of the Doeing traffic system.

We all know that Do Ying or the TikTok China is actually the largest short video application.

It's 1k part is our QR rewarding cost.

So for one of our

billboard plans a top performing video could drive the best play and the conversions can earn probably like probably one seven hundred

rewards for one video so the video roughly got like

17 000 likes roughly about 170 views so by the end of the 2024 the

integrated the publisher program into the ocean engine as well.

So the RDP, so they said some screenshots of the video from the legend of Marshall.

I can say the payment is really seamless by using the RDP payment system.

So they got the seamless RDP integration.

They have the instant RDP payment system.

I think it's probably the fastest payment error for the minigame.

Less than five seconds from the pay to getting the reward in the game.

Another one, they also have their own IA advantage.

They have the top off, extensive, the e-commerce eye.

And another thing, they just hear a lot of stuff from the WeChai and the Tencent system.

So they copy the

exactly top game from the WeChai.

So they're just featuring all the top games on the WeChai.

You can see they got the game from the 37 game, they got the top world, and the SRG looks exactly like the WeChai minigame laterboard.

So they also have something like a little different from the WeChai.

So the LiPay minigame link the casual play to a payments and the shopping player own system.

So the player they can earn from the gameplay and task and redeem the point into the coupon across the LiPay or the top out system.

So the RDP

creating a reward to purchase the

increase the retention and also the transaction while generating data for their targeted promotion.

So for example, for example, if I play the game for three levels, I got something like 30 cons.

If I finish five gameplay, I got 30 coins.

I can redeem the coins for some coupons.

So I'll talk about the OEM mini game growth.

So OEM will be different.

So this is Top World China.

We can see you can instant access from icons and also they providing like more entries, like integrate with their system or the OS features.

They integrate

at the hardware levels, so which enhance the performance and reduce the overheating.

Another thing, they're giving the more entries.

So

this is the OS entry, like browser search, the game center, the same events, the desktop icons, also the cards, and global search.

So you can find the minigame everywhere in the operating system.

And another thing, which I heard from the OEM, the gaming like more features, something like the floating window for the idle game, you can idol in a game while watching while surfing the short videos and probably more HAI features in the future.

You can use the HAI feature, for example, from the media tag or the Snapdragon chips using the LRM, the large language model, or the image generation from the system feature or the chip features in the future.

So, Crash Show is quite interesting.

So, the Crash Show minigame is actually, I think, still at an early stage compared with Do Ying in 2023.

What am I watching?

Is this a UA creative?

What is it?

It's something perfectly accurate.

It's one of the hottest memes.

Yeah,

and

yeah, that's the Italian brain road one.

Yeah, and a lot of people they made this video into the mini game

Wow, they made something like a runner game and like a lot of cacher games are made

based on this video and we can see a lot large portion of their user is actually from probably third or the fourth tier of the cities so the rustic memes are very popular and another thing I think the operation are quite looser.

And there are many case mini games.

Things we can say are Leatherball.

There are a lot of similar games on the Lather Girl Ball.

So they say something

you can see are made from this video.

It's an AI-made Chinese, like mistake-based meme.

And that's a game.

It's quite awkward for me to.

But on the other hand, Kwai Shu has more like male users.

Probably more than 60%

of the users are male users so it's making it's a really good option for the mid call ia and the retro ip sorry it should be the iap

for it's really good for the ip ua so i'll talk something about me tuan meitan is a lattice uh chinese lifestyle APP including the food delivery, the travel, and all the local service you can find.

So they say the user center, you can find all the mini game is actually integrated into the user center.

There are s three kingdoms.

There are uh I like to say like a lot of top games from WeChai.

So the mini games are actually collect with the mate with the mate twice rewarding system.

The user can earn and spend the cons on the food delivery on a local system.

They can make on the con by playing the game.

And there are a lot of mini game.

They actually they have the something like the food mini-game.

They can earn the real food from

the casual food game.

So the Mani Me Twin users are the regular player for the lifestyle service.

So which lowering the barrier for the in-game purchase.

So the IP revenue has grown really quickly since there are no barriers for the purchase payment.

They need to spend the money every day for all the service since all the services are not free

in the application.

So they feel they need to pay in the IAP.

And how much does Matewan charge from IAPs?

Is it 50%?

30%?

Yeah, still 50-50, but they get a lot of rewarding for the UAE.

If you get the UA from their UA system, probably you get more

percentage.

Do they publish that?

Or is it just, yeah, is it secret?

So if you spend like more than

you get everybody,

they will give you a balance, depending on the amount of the money.

Do I get it?

That is basically a giant offerball that you get stuff back and everything.

Sounds like it.

Yeah.

Yeah.

It should be the similar thing.

If you probably, if you buy more UA, if you top up more UA, you get something like balance reward.

Probably like 3 to 5 percentage, depending on the amount of money.

you buy for the UA.

Okay.

Amazing.

So there are some like mini games guys in China.

I'll

just like category probably like four types of game.

So first for the super casual game, I like to say it's not good for the Chinese mini game.

It's need very high-rate memes.

So you can see the memes in China is quite different from the memes in TikTok or the Facebook or the

Instagram.

You need also need a lot of organization and content swipe for this kind of game.

So for the runner game or for the stigma slide game, you need to change not only the memes but also the game contents.

And we also have very restricted package size.

So the recommendation IA package size should be smaller than 30 megabytes.

So the IA for the super casual, I would say it's possible the low margins,

low margins, and really high risk.

So what I reckon is like the this is like NAITS master and also the catch goose case

which is 3D

which is

which is 3d casual game in China.

This kind of game I really scale this year.

It can scale where the IA without Iceman but still require with a lot optimized levels.

I like to say the top three needs game in WeChai probably has more than 1000 levels already.

You also need a lot like culture localization and the smooth performance and also the monetization for the AD as well.

So this is like this game like the Ban Ban

Survivor I think I think it should be the the name.

Another one is the legend of the mushroom.

So both two games are really have really good revenue both in China and outside China.

So I like say T D, the tower defense or the idol game are good fit for the shell loops.

And also it's good for the mixed monetization including probably 70 from from IP, the rest from IA.

But there are a lot of challenges for the performance.

For example, for the Bumpum survivors, you need to update for the low-tier mobile phone, probably iPhone 7 or the iPhone 8.

You need to dealing with probably solid,

how to allow the user's mobile phone to run with 60 FPS, with solids of the bullets, how to master.

It's still a lot of work.

And the last thing is for the 4x, the SRG or the RPG.

I don't really recommend it for the global market to try.

It needs a lot of localization, a lot the OP cost, and also need you really need to find a top local publisher to get you ISBN proof.

Otherwise, the trail and IRO costs are really boring.

Like you say.

Basically, if you're not a Chinese forex company, don't even try.

Yeah, I recommend it.

You know, this year I went to Shanghai.

There's a lot of rumor to say the foreign company that

they have the developers have the

staff in China, they can guide the treatment as a Chinese company for the ISBN.

I asked a few officers, say this police

are not guaranteed yet.

So there's no guarantee for the ISPN police in Shanghai yet.

There's a rumor era where a lot of foreign, like you have asked me, could I guide the Ice PM treatment like same as a Chinese company if I open a company in Shanghai?

I say not yet, probably next year or the year of next year.

Okay, so it doesn't matter if you're a big China big uh Western company opening a local shop in China, you still don't get the ID in two years.

It's uh still something like quite tricky.

You just

don't like people knowing you are a foreign company.

Of course.

Okay.

But it's quite tricky and risky.

If your game gets reported, you may lose all the revenue from the platform and also lost the SBN you buy from other Chinese companies.

Yeah, thanks for sharing a lot.

Like been very, very insightful.

Thank you.

If you can just say where people can reach you or if they're looking for you, how can they contact you or what would be the best way to get in touch with you?

Okay, people can find my information from the website, the new Bukai.

So, this is my WeChai account.

There's also my email in these websites as well.

You can find my, you can also get my, I'll also write my emails.

So, this is my personal emails.

Yeah, we add the links to the show notes.

Yeah, yeah, yeah, yeah.

Okay, feel free.

I will write stories most about how to fare the developers with you, agent.

Okay.

Any other words, Mate?

All good.

All good.

All good.

Thank you very much for listening, guys.

And also thanks for coming on the podcast.

Please, if you like the episode, comment in the comment section, join the Slack channel, and I hopefully see you next time.

Thank you very much.

Bye-bye.

Bye-bye.

Bye-bye.

Bye-bye.