(Yicai) Aug. 4 -- Overseas sales of Chinese self-developed games soared more than 30 percent in the first half of this year from a year ago, marking the biggest jump in almost six years.

Sales of China-made games in overseas markets topped USD12.4 billion in the six months ended June 30, according to a report by the Game Publishing Committee of the China Audio-Video and Digital Publishing Association released on July 30. In comparison, the figure rose 11 percent in the first half of last year from a year earlier.

For the Chinese market, total game sales reached CNY188.5 billion (USD27.9 billion), with that of self-developed products rising 16 percent to CNY163.4 billion.

However, Chinese developers saw overseas download numbers and in-app purchase income from mobile games decline, while customer acquisition costs continue to increase, meaning that they are generating more revenue in an environment where traffic is more expensive and users are harder to attract.

In June, 38 Chinese mobile game publishers ranked in the global 100 by revenue, with their combined income of USD2.1 billion accounting for around 42 percent of the total, according to Sensor Tower.

Chinese Developers' Efficient Iteration Boosts Growth

Chinese developers' overseas sales jump was supported by the continuous operation of long-term games and the stable contribution of new releases, the report said.

The iteration efficiency, along with the gradual improvement of overseas infrastructure, has enabled Chinese developers to capture a larger share overseas, industry experts added.

The core advantages of Chinese developers and publishers are their adaptability and rapid iteration efficiency, noted Christoph Rupp, vice president of China sales at German mobile analytics firm Adjust. Leveraging the country's vast datasets and mature technology stack, domestic developers can quickly test, localize, and achieve scalable promotion, while also being able to achieve scalable product performance at relatively low costs, he added.

In addition, while top companies maintain steady overseas revenue, small and medium-sized enterprises and independent teams are also gradually rising, Rupp noted. Mid-tier and casual mobile games have performed well in overseas markets, while mini-program games have become a new growth engine, he pointed out.

AI Lowers Upfront Overseas Expansion Costs

Artificial intelligence has further compressed the upfront costs of going global, said Man Xinru, Asia-Pacific head at mobile app optimization marketing and retargeting platform Liftoff. Translation, asset creation, market testing, ad optimization, and other tasks that used to need different teams to collaborate take less time thanks to AI, Man added.

Nearly every company exhibited AI service products at the Business-to-Business exhibition hall during China Digital Entertainment Expo and Conference, better known as ChinaJoy, which wrapped up in Shanghai yesterday. For example, Liftoff showed its AI ad optimization platform Cortex, Unity its advertising AI model Unity Vector, and Adjust its backend AI analyst Growth Copilot.

According to a report by global market intelligence and advisory firm International Data Corporation, the adoption of AI in companies' overseas marketing has reached 79 percent.

Thanks to AI tech enhancing research and development as well as operational efficiency, small and medium-sized companies can also enter the market, according to Qi Kai, general manager for Asia-Pacific marketing at Unity. By leveraging faster response times and more flexible iterations, they can achieve product format or monetization model breakthroughs, Qi added.

Prosperity of Outbound Infrastructure Services

Outbound growth has driven the flourishing of related services, which in turn has lowered the barriers for companies to enter international markets, Man said. In the past, a game company might focus solely on one overseas market, but "with 1.5 times the effort now, they can potentially enter three to four markets," so everyone wants to share in the opportunities, Man stressed.

As Chinese gaming companies go global, marketing, payment, data analytics, and localization services providers have formed a new infrastructure. Overseas expansion is gradually evolving into a supply chain with finer divisions of labor and more participants.

Global Traffic Growth Slows

It is becoming increasingly difficult to get users to download a new game and maintain spending overseas, several companies told Yicai.

Overseas mobile game in-app purchase revenue of Chinese firms dropped 6 percent to USD33.1 billion in the first half from a year earlier, while downloads fell 4 percent to 22.2 billion, according to Sensor Tower.

Over the past year, the cost per install for global gaming applications has increased to 56 US cents from 43 US cents, according to Adjust. In the US market, the figure rose to USD1.71 from USD1.31.

The US market accounts for 32 percent of the revenue of self-developed Chinese mobile games. This highlights that although it is highly competitive and customer acquisition costs are the highest, it still possesses the strongest user payment capacity, making it a core market that gaming companies cannot afford to overlook.

In addition, Southeast Asia remains a valuable market for investment, with a large user base and active mobile internet usage, Rupp said.

According to Adjust, Southeast Asia's app installations increased 6 percent in the first half of the year from a year ago, with that for entertainment and social applications soaring 94 percent and 99 percent, respectively. Chinese applications account for 24 percent of installations in Indonesia and 22 percent in the Philippines.

Latin America is another rapidly growing region, with many young users and a strong demand for mobile entertainment. For example, the installation share of Chinese applications in the Colombian entertainment and social sectors has exceeded 60 percent.

However, payment infrastructure, exchange rate fluctuations, commercialization efficiency, and other challenges in Latin America remain a test for companies' operational capabilities.

Editor: Martin Kadiev