Guest post - Hill Climb Racing 2 journey to China

29.05.2020

Guest post by Fingersoft


Authors: Ville Rauma, Chief Operating Officer / Daniel Rantala, Business Development Director

Foreword

Even if you have a globally successful mobile game, it doesn’t mean it will be easy to break into the Chinese mainland mobile market. We have learned that the hard way, for sure. After almost 500 million accumulated installs in China, we’ve gathered many learnings about what steps to take (or not to take) when entering China with your game. We figured that it’s about time to share some of these insights — which is exactly what we are going to do in this post.

Before we start digging into what we’ve actually done in China, let’s take a very brief look at our games. If you’re a game developer or marketer reading this, there’s a high chance you already know our games, but let’s take a look nevertheless.

Hill. Climb. Racing. You climb hills and race against time, and try to survive as long as possible without breaking your neck. True to its name, that’s what everything began with in 2012 when Hill Climb Racing was first released on Google Play. Little did we know that the game would eventually reach over 1 billion installs, and literally become an iconic game among titles such as Angry Birds, Subway Surfers or Temple Run. The Android launch went amazingly well, and along came other platforms such as iOS and Amazon, as well.

With the success of Hill Climb Racing (and a loud community of fans), it felt right to develop a sequel that would realize many of the learnings and player requests we’d gotten from the original game’s development and launch.

The development of Hill Climb Racing 2 took almost two years and multiple iterations, but in December 2016 when it was published on Android and iOS, we knew we’d gotten something right. We were expecting some success based on positive player feedback from the soft launch, but it took us completely by surprise how well the game was taken. We managed to keep the original feeling of HCR, but improved the game pretty much on every aspect with the main focus being on multiplayer. Three years later (May 2020), Hill Climb Racing 2 has reached 300M+ installs globally, and has over 20M monthly active users.

So that’s pretty much that: Hill Climb Racing (2012 →) and Hill Climb Racing 2 (2016 →) hit it big, and we decided to turn our eyes towards the potentially lucrative, but hard to reach China. Lights, camera, action! So the story began.

Background

To keep this blog post from becoming a blob post, here’s some basic background information you might find useful while reading this article:

1) In China, it’s legal to publish games only using a Chinese company that has the proper permits to do so (game-specific publishing license)

2) In 2016, there was practically no advertising in free to play games, so all the expected revenue came from iAPs

3) Prior to 2016, a lot of casual f2p revenue was coming from so-called ‘carrier payments’, which meant that the players were often paying via their phone bill. Carriers would bill it the IAP, and then pay the publishers their share of the sales

4) Play Store is not available in China, and instead there are tens of different Android stores that people use. The biggest Android stores are owned by major operators or phone manufacturers, but there is a vast number of stand-alone stores as well

In this post, we often abbreviate Hill Climb Racing(s) as HCR(s), so HCR or HCR 2. To give you some idea about the performance of the two titles up this far in China, HCR original has attracted 390 million installsall-time, whereas HCR 2 is at 93M installs. Note that these installs are combined from multiple Android stores.

HILL CLIMB RACING 2 SCREENSHOT .

2015: HCR original launch

Though this blog post focuses on the launch of our flagship product Hill Climb Racing 2, let’s take a quick look at our actions in China regarding our original game title, Hill Climb Racing. The original HCR was published way back in 2012 globally except for China, and initially we had no plans to launch in China.

However, at this stage MyGamez contacted us and they were keen to help us enter the Chinese mainland market as well. After some negotiations and research, we decided that it wouldn’t hurt us to try and entered into a distribution agreement with MyGamez. After localization and preparation, the game was published in China in early 2014. We went in with no real expectations since the common sentiment at the time was that China is dominated by mid to hardcore games and that casual genre doesn’t really work.

To our surprise, we pretty soon realized that the myth about Chinese players disliking casual games is wrong, and HCR became a hugely popular game in China.

As a side project, we also made a more culturalized version of the game, which is also fairly popular but never reached the levels that the original version did. Based on that we think that if you have a great game, you should just trust that instead of trying to change it into something else unless there is a very good reason for it.

HCR ORIGINAL, CHINA EDITION.

So, after X years of HCR being available in China, let’s take a look at some numbers.

HCR INSTALL NUMBERS BY CHANNEL, JAN 2015-MAY 2020 (Original + China Edition).

As is common, Oppo, Vivo, Huawei and Tencent are responsible for a tremendous percentage of HCR’s total installs in China. However, it’s noteworthy that HCR has been available in China for more than 5 years already, so we don’t recommend you to use this table as a reference for today’s launches.

2016: Getting Started

Okay, now that we’ve covered the launch of the original HCR, some key background information about the market and our general download numbers, let’s leap towards HCR 2 and its launch.

With HCR original having reached some hundred million downloads in China and HCR 2 being finalized for launch, we entered into negotiations with a few publishers with the aim to launch HCR 2 in China on all major Android channels. We wanted the launch to be as early as possible; since the original HCR had done well in China, we could expect some success.

With HCR 2, we decided to negotiate with 2-3 Chinese publishers from day zero, since we believed that we could get a pretty good deal based on the original HCR’s success. Naturally, one of the publishers was MyGamez since they had handled distributing the original HCR well.

Our goal in the negotiations was to get the best possible revenue share while giving up minimum guarantees.

Hill Climb Racings are evergreen titles, so we decided to think long-term (which is what we’re always focusing on at Fingersoft). Rejecting MG is not that common, especially nowadays; developers heading into China often require a financial commitment from the publisher to make sure that there’s at least some upside for them, which might result in the revenue share deal being significantly lower towards the developer. At worst, this can also decrease the publisher’s internal commitments on UA, tech support and marketing since they are already investing into the game launch via the developer’s minimum guarantee. Though striking a deal based on trust and goodwill increased our financial risk, we sincerely believed that the game could work well, which is why “higher rev share, no MGs” was our weapon of choice.

While the publisher negotiations were going on, we released HCR 2 globally (excluding China) in early December 2016 on Android. The game turned out to be a hit. We had around quarter of a million concurrent players at launch with millions of installs piling in in a short amount of time.

The success of HCR 2’s global launch added pressure to the China launch as well, and in the end we reached our negotiation goals with two of the publishers only weeks after HCR 2’s global launch. We were in a position to choose; we’d reached common ground about publishing terms with a handful of publishers, and eventually decided to go with MyGamez. After all, we already had an ongoing collaboration with them thanks to our history with the original HCR, so the whole thing was easy to set up.

On December 30th we signed the agreement with MyGamez to publish HCR 2 in China on over 80 different Android channels.

Q1/2017: Negotiations and Launch

Now, over the years we’ve learned a few rules about working in China. First is: expect something to go wrong. Second is: expect everything to take much longer than you think. Despite all our previous experiences, we had no way of anticipating what was going to happen.

In HCR 2’s case, we were aiming to get the game launched in China as soon as possible, and started preparing for it while the game was still in development (early 2016). There are multiple different areas that need to be handled before you can launch your game in China, some of which are game dependent. These areas are, for example:

  • Localizations
    • In-game texts, offers, images with text etc.
  • Regulations compliance (more on this later)
  • Servers
    • All servers and customer data has to be located in mainland China
    • Only Chinese nationals can own and operate servers that are used to publish anything
    • AWS and Azure are both available in addition to other cloud providers like Alibaba
  • OPTIONAL: Business Development
    • Discussing with the biggest Android channels to see if you can get launch featurings and game promotions.

Preparations went reasonably well, and HCR 2 was launched in China in Jan 2017 with a promising reception of 2,6 millioninstalls in the first month. What’s noteworthy is that at this point, Chinese regulation was not as tight as it is nowadays, and a publishing number was not required to launch your game as long as you had other compulsory stuff covered (above points).

Near the end of 2016, we had started to hear rumours that the Chinese regulators would start requiring an official publishing number for releasing a free to play mobile game in China. In practise, what this would mean is that you’d have to submit your game to a government review and get a publishing number for your game IF your title meets all the requirements. After your game had been greenlit by the government, only then you could start monetizing your game (IAPs, remember: at this time ads were practically nonexistent in China for casual games). Review was expected to take a few months.

Since we had done extensive preparations and had a familiar publishing partner, MyGamez applied for the publishing number for us as soon as it was possible, and we moved forward with the launch. Initially, the new process didn’t seem like a big concern to us, because the new rules were supposed to cover only new games which HAD NOT already been published — lucky for us, we got the game out before the new regulations were in place.

Up this far, it was all nice and dandy. Pretty good launch, no major issues… Well, in early March 2017 we got interesting news from MyGamez: the government regulator had decided that all games would require the publishing number and that any game that was selling IAPs would have to stop until they had been approved. In theory, you COULD keep the game in Android stores without iAP sales, but since we wouldn’t be getting any revenue it made no sense to keep HCR 2 available. And so, HCR 2 was pulled from all channels in the beginning of March 2017.

Back to the drawing board.

##
Q2/2017: Road to Relaunch

Thinking positively, the delay meant that we could work on rereleasing the game with a full feature set, and it looked like the review process should only take around 6 weeks. In the end, we finally got our approval and publishing number in mid-april 2017, which was not too bad, all things considered.

You would think that now we’re finally ready to launch, but alas, no. While all of this was going on, there was a separate challenge developing with the carrier billing system that caused revenues to go down in the original HCR. Around early 2017, mobile carriers in China started to disable app iAP payments, which in practise prevented players from being able to buy anything. The reasons had to do with a customer complaint system that would cause billing to shut down for months with, apparently, a very low number of complaints. And there was no information about the topic of the complaints, so we wouldn’t know what was causing the issue(s). This was happening to many developers, and sometimes even whole Android channels.

What all of this meant for MyGamez and us was that we needed to quickly implement new online payment methods for the original HCR, and it only made sense to push HCR 2 re-launch to a date when we would have the billing improvements working. After all this, HCR 2 finally re-launched on the 24th of July 2017. In the first 30 days after the relaunch, we got some 6.7 million installs and little under 600k DAU. Not quite as much as we had hoped, but after the whole launch-remove-relaunch fiasco it was a reasonable start.

Today in late May 2020, we are nearing a 100 million download mark in China with Hill Climb Racing 2, and have a healthy user base with even some signs of growth after our latest push of new content and features this year.

These results would not have been possible without the vigilant efforts of Mikael and the whole MyGamez team, who have helped us make sense of a market that can sometimes seem impossible. MyGamez has done a good job handling all of the Android store distributions and communications, and since we all love numbers, let’s take a look at the best-performing 10 stores by install numbers for HCR 2:

HCR 2 INSTALL NUMBERS BY CHANNEL, JAN 2017-MAY 2020.

The above table only shows the top 10 stores by download volume, and there are other Android stores in China where HCR 2 is available as well. Taking a look at the table, the last 5 Android stores can’t even begin to compare to the Big 5 Android stores (Oppo, Vivo, Huawei, Tencent and Xiaomi) in the beginning. The Big 5 amount to a whopping 70M installs out of the 82M in the table, hoarding 85% of HCR 2’s all-time installs. Not bad numbers, after all!

Good-to-know learnings

Finally, we’d like to share some concrete key learnings about the Chinese mobile game market and negotiating publishing deals with publishers in general. We’ve always been in cahoots with MyGamez (and found that to work very well for us), but there’s a lot of publishers actively looking for new content from the West: ifyou’re an aspiring game developer hoping to find a Chinese publisher/move further with your game in China, here’s some points to keep in mind.

  • Getting a Chinese game publishing number (ISBN)
    • do not expect the review process to be fast: generally, it takes 8-12 months for an offshore developer to get the license (and that depends heavily how much you need to change the game and its assets)
    • There are multiple Chinese bureaus that the application will pass through: ISBN agent → Chinese copyright bureau (game name review) → provincial bureau (content review) → feedback to developer, resubmit, repeat until pass → Central bureau (Beijing) → PASS!
  • Game content & technical requirements
    • Chinese language localization is required, not optional (Simplified Chinese)
    • There is a lot of content-related regulation you need to pay attention to and any competent publisher will provide you with up to date information about it.
    • As has been mentioned in this document, all operating servers and customer data must be based in mainland China (and owned/operated by a Chinese national).
  • BD/publishing
    • Remember that China is heavily dominated by the Android OS (~60-70%), and that there are hundreds of apk distribution stores. But working with top 5 is probably enough to start with!
    • Publishers in China are primarily responsible for contacting stores and maintaining platform communications, but if you as the game’s Western developer take actions towards the stores together with your publisher, it’s a sign that you’re serious about your game and China — as you should be!
    • Upkeeping a separate apk can be a lot of work for a small(ish) game company, and there’s loads of other resource-consuming work (localizations, customer support, marketing materials, etc.): make sure you choose a publisher who can commit enough resources to handle/help out with these things
    • As a continued point to the above, it’s important to try to keep the content updates roughly in sync with the global version. If updates lag behind, true fans of the game will start complaining, and either stop playing or even switch over to playing the global version but without any ability to pay as Google payments don’t work in China. Keeping up a “one content update per month” schedule is advisable.
    • When negotiating with Chinese publishers, remember to consider all possible outcomes: “what if my game flops completely? What if my game becomes a mega success in China?” Make the terms so that you won’t feel bad either way, you’ll either happily share the success with the publisher or fall softly.
    • Pick multiple publishers to negotiate with and check from their existing Western partners how the publisher has done. You can’t substitute a direct checkup.

End words

It’s been a ride, for sure. To describe all the steps we’ve taken — and all the challenges we’ve encountered, and eventually countered — would require a lot more text and time than this blog post. However, it’s been refreshing writing all of this down, and we hope it’s been an interesting read for you — perhaps you even learned something!

All in all, despite all the warnings about casual games not working out in China, it turns out that China is full of people who love Hill Climb Racing as much as we do. For us at Fingersoft, that makes it worth the effort.

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