Yodo1, a Beijing-based company that works intensively with Western game developers to bring their titles to the Chinese market, raised $5 million from SingTel Innov8, the corporate venture arm of a mobile carrier. An earlier investor, Changyou Fund, also participated in the round.
Yodo1 has a co-production model where they actually get access to the code base of a Western developers’ game. They modify the graphics, virtual goods and music for local Chinese tastes.
An example CEO Henry Fong points to is Ski Safari, a game from Brisbane, Australia’s Defiant Development. In the platformer title, a character races up and down ski slopes (kind of like last year’s indie hit Tiny Wings out of Germany). For the Chinese version, they made the architecture of the houses in the background more Chinese, added a zither to the music and put in terra cotta warrior outfits.
“We’re a full blown co-production team,” Fong said in an interview a few weeks ago at San Francisco’s Game Developer Conference. “We deeply culturalize the game.”
Yodo1 says it now has 25 million monthly actives in China for games that it co-produces, including XMG’s Powder Monkeys, HandyGames’ Clouds & Sheep, and Robot Entertainment’s Hero Academy. The company is also adding five to six million new players each month, and daily actives and revenue are doubling month-over-month.
That reach comes at a time when the Chinese smartphone market is finally reaching maturity. Mobile analytics startup Flurry said February was the month when China finally passed the U.S. in terms of the number of active Android and iOS devices.
At the same time, local payment options are getting better. In late 2011, Apple added local bank card payments, which cut down on fraud dramatically. Fong also said that the country’s three major carriers, China Mobile, China Unicom and China Telecom, did a re-start with local carrier billing that made it easier for mobile developers to monetize their users. A rival, CocoaChina, which does both first-party games and publishing, said it expects to see a mobile game do between $10 million and 15 million in revenue per month in China this year.
Fong chose SingTel as a lead for strategic reasons. The parent company of the fund has about 450 million mobile subscribers across Southeast Asia, which makes for a nice potential base of future customers.
Here’s a presentation he recently did on how to break into the Chinese market, and its unique distribution and monetization hurdles: