12 Apr

The rise of Steam in China

The total number of Chinese steam users has officially crossed the 10 million threshold and now numbers 14 million. According to Steamspy, an application programming interface that tracks sales and other statistics on Steam, Chinese users now take up 6.49% of the total user population on Steam.

  • The initial Influx of Gamers

Steam was not well known in China a couple years back. However, the release of Dota 2, a Multiplayer Online Battle Arena (MOBA) game, changed everything.

Dota 2 is a stand-alone sequel to DotA (Defense of the Ancients), a community created game mod for Blizzard’s Warcraft 3. DotA was already a popular competitive game with a massive player base across the country in China. Professional players were organized into teams, and professional teams competed online, and fans could watch their favorite gamers battle it out in online tournaments which were broadcasted live on a daily basis.

The development of Dota 2 was caught in a trade mark dispute between Blizzard and Valve. Eventually the dispute was settled with Valve gaining the right to continue with Dota 2 development. With the release of Dota 2 on Valve’s Steam, Chinese players flocked to the platform to get their hands on the second iteration of their favorite MOBA game. Till this day, Dota 2 remains hugely popular, outranking Team Fortress 2 and CS: GO combined.

  • Steam’s Growth in China

Like any other foreign brands or products that want to enter the Chinese Market, Steam’s growth in China is anything but smooth. However, Steam is popular in China for one important reason – pricing.

An important factor that contributed to the rise of Steam is Valve’s geographic pricing strategy. Games on Steam are sold at different prices in different countries and regions. Valves games are selling at relatively lower prices in developing countries than in developed countries.  For example, the game Counter-Strike: Global Offensive costs 1480 Yen (12.89$) in Japan. In the US, the price is 14.99 $ and 48 Yuan (6.97$) in China.

China was notorious for pirating software during the early stages of internet penetration. Chinese got used to free stuff on the internet, be it software, movies, music, and of course, video games. Selling games with lower prices on Steam make the games themselves more competitive in the Chinese market.

The diversity of game genres on Steam also played a part in Steam’s growth. MMORPGs and RPGs are popular in China, but other genres are lacking in availability. However, backed by big game studios as well as independent developers, Steam is the ultimate purveyor of diversity. Thus, Steam became a heaven for players who look for different games and for a different gaming experience.

  • The Future of Steam in China

 As the world’s largest digital distribution platform, Steam still faces challenges from China’s domestic developers/publishers (Such as Tencent Game Platform – TGP) and foreign game developers/publishers (notably, Blizzard’s Battle.net).

For platforms like Steam, traffic is king. In China, in terms of player counts and time spent in game, the most popular games are Tencent’s League of Legends (Acquired by Tencent in 2011), Blizzard’s Hearthstone (and Possibly Overwatch), and Valve’s Dota 2 and CS: GO.

If you head to an internet cafe anywhere in China, you will notice that the majority are playing these games. However, before Overwatch was launched in 2016, most people in internet cafes would either play LOL or Dota 2. After the launch, people started to shift towards games like Overwatch.

How can steam prevail against its competitors? That’s not a question that can be answered easily. With “star” games like LOL, Overwatch and Dota2, people are abandoning Steam for its competitors’ platforms. Having a lot of games on a platform certainly helps, however, what steam needs the most are “star” games of the future.

Edward Yang authored this post, he is a Junior Executive at Influence Matters in Beijing

References:

https://steamspy.com/

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