London becomes staging post for Chinese company in Europe

The Chinese mobile games company Rekoo has opened an office in London, aiming to market its wares in Europe and introduce games from the continent to developers in China.

Rekoo, well-known for games such as Finding Something and Sunshine Winery, already has a presence in the United States and Japan. It now says it wants to invest heavily to increase its market share in Europe, and expects to generate about 60 percent of its revenue in Britain. It also wants to focus on France and Germany.

"The UK is strong in creative industries and has a large games market, and so has China," says Pan Jinyu, vice-president of Rekoo. "Therefore, we want to connect the games market of both countries."

Rekoo, founded about five years ago and with headquarters in Beijing, says it now has 20 million active daily personal computer games customers and 10 million daily smartphone games customers. It says it has more than 500 employees across Asia and was one of the first Chinese companies to provide games on Facebook.

The company is the first from the Chinese mainland to set up an office in a technology center in east London that the British government has dubbed Tech City. Other companies that have set up operations there include Cisco, Facebook, Google and Intel.

Pan says Rekoo will bring to Europe many Chinese games suitable for Europeans, particularly those focusing on strategic thinking.

Many of the games will have references to European history, such as Greek mythology, which means European audiences can easily relate to them, she says, adding that Rekoo's target audience in Europe would be mainly those aged between 18 and 45.

At the same time, Rekoo says that in trying to introduce European games to China, it will work with European mobile game developers.

Suitable games for a Chinese audience will be those that do not involve deep thinking and are more relaxing to play, she says, citing Angry Birds, Candy Crush and Fruit Ninja as popular examples.

Rekoo is well placed to introduce European games to China because it understands the Chinese gaming distribution channel very well, Pan says.

An important step involving distribution in China is making Chinese customers pay for the games. There are many ways of generating revenue in the Chinese games industry, she says, including asking customers to pay for certain tools needed to play or inserting advertisements for other games into already popular games.

Charging customers in remote rural towns may be difficult, so games companies typically link up with mobile companies to allow customers to pay through text messages, Pan says.

This is different from the West, where mobile game payment is typically made by the mobile account linked to the user's credit card.

Pan says distribution channels in China's games market is also much more diverse than Europe, so Rekoo's help will be crucial for some European games developers' entry into China.

"In the UK for example, most games are distributed through two platforms, Apple Store and Google Play," Pan says. "But in China there could be more than 1,000 different distribution channels, so local knowledge is crucial to succeed in this market."

Pan says a big challenge for Rekoo working with games developers in Britain is assuring them about intellectual property protection in China.

"This is one reason we wanted to have a physical presence in the UK, because we can then sign all our contracts in the UK, which are legally binding under UK law, so European companies can be assured that their IP will be protected."

Pan says an advantage Rekoo has over other Chinese games companies is its international background and experience of the company and that of its management.

Many have studied or worked overseas, so they can better understand how to do business with Western businessmen.

The company has expanded into Japan and the US in recent years with the support of venture capital, and Pan says this has taught Rekoo more about operating in overseas markets.

The decision to expand into Japan in 2009 was largely because her team realized China's domestic social gaming market was very much a new phenomenon, and customers were not in the habit of paying for games, she says.

But over the years Rekoo increasingly focused its investment within China as demand boomed and more consumers adopted better paying habits, Pan says

The company also expanded into the US with the help of venture capital, forming a partnership with Facebook and offering its games on this social network site, Pan says.

Another of Rekoo's distinct advantages is its willingness to place partnership at the heart of its business model, which allows European developers to have a fair share of revenue generated from the games' sales, she says.

"We would pay for the marketing and promotion of European developers' games in China, and also help some small game developers to cover some of their costs, which many Chinese companies would not."

Since Tech City opened in 2010, the number of digital companies in east London has grown from 200 to more than 1,500. London hosts 24,000 IT companies, which is the highest number in Europe, the local government says, its nearest rival being Paris with 15,500.

Rekoo's UK investment was announced in mid-October at a time when London Mayor Boris Johnson and the UK Chancellor of the Exchequer George Osborne were visiting China to attract Chinese investment.

Pan says the UK's inward investment agency UK Trade and Investment arranged a brief meeting for her with the British Prime Minister David Cameron.

"I think he is sincere in helping London's Tech City grow, and allowing it to become the UK's Silicon Valley. He is willing to put in effort and time to make this possible."

Contact the writers through cecily.liu@chinadaily.com.cn

A games enthusiast plays the game Finding Something developed by Rekoo. Provided to China Daily

(China Daily European Weekly 10/25/2013 page22)