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This month's StartWatch is edited by WEB20SHARE’s WatsonXu and

MOBINODE's LuGang, CindyJiang, This

is a monthly bilingual report. Thanks much

to our English translator MoyHau. We look

forward to hearing your feedback through

mobinodetv ATgmail.com

STARWATCHOctober, 2010

星观察With this monthly report we hope to: 1) highlight the best content and opinions from non-mainstream independent bloggers. 2) provide overviews and commentaries on the views of innovators, and 3) give thoughts on both hot and new topics in Chinese web industry.

TRANSFORMATIVE CHANGEOctober – it’s when the seasons change, and we find ourselves with a gradual cooling off and the rapid onset of winter. Some people like to demarcate stages of their business proceedings with the start and end of the seasons.

Some people like to demarcate stages of their business proceedings with the start and end of the seasons because it implies change in big leaps and bounds just like the forces of weather and climate. In this issue we’ll be exploring “transformative change” and the things it entails and implies.As with before, many people have sights set on group purchasing and games industry. In the group purchasing area, we can look at what’s going to happen or change in that crazy mini-landscape, a topic which surely will bring up a wide variety of opinions. As for the future of game industry, we’ll look at how a number of players, innovators and networks are doing what they do, what role their fans play, and of course also what changes we can predict for them in the future.We’re also making some changes ourselves. In line with feedback from readers, starting with this issue, we’re simplifying the English title of this publication from StartupsWatch to the better-sounding StarWatch.

Gunning for the market,

and recognising the power and value of

innovation.

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According to this news (Chinese), early this afternoon, ex-founder of Citydeal which was acquired by Groupon early this year and now Groupon’s business development director have held several meetings with five popular Chinese Groupon clones, Meituan, FTuan, Lashou, Aibang and QQTuan. (you may also read our previous article Comments and Reviews on Chinese Groupon services)

The news says Groupon met these clones one by one and the detail of each meeting can not be disclosed due to the NDA. But according to Lin Ning, CEO of FTuan who attended the meeting,  he said he could confirm that Groupon has not signed any deal with any Chinese clones.

An insider said Groupon’s visit to China this time had two purposes, firstly to understand the local market and local regulation; secondly to look for the right local partner. He said, likely Groupon will follow the same strategy when it entered Japanese market, i.e. acquiring one local clone.

Sarah Lacy of TechCrunch used to question about Groupon’ slow response to Chinese market and suggested Rob Solomon of Groupon not to underestimate the Chinese speed. And Rob said, “Over time, we will figure out China..” Now it seems that Groupon finally took one step further to China.

So what would be the next? And which one will eventually be the super lucky guy being acquired by Groupon? Probably no one knows it yet. But what’s for sure is that Chinese market could be much more costy and risky than Japanese one as the market already goes crazy.

Enjoy the following two cases:

Case One – 200 Smart cars were sold on Taobao’s group-buy site within only 3.5 hours! Every buyer saved rmb41,000 (~$6,190). Note that one resource said that the total number of Smart sold in China in 2009 was only around 4,000.

Case Two – Lashou is running a campaign right now to attract more attention. The biggest winner of this luck-draw promotion campaign will be given a Flat which worths rmb200,000 (~$30,198).  Only two days, 258,484 users have registered to join the draw, and still 8 days to go.

what would be the next?Challenges and Changes in the Chinese Group Purchasing Area

Focus

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Looking at Tokyo Game Show 2010 as a model for successHow can China’s CP be internationalized?

TGS is one of the largest game expos in the world, and have massive impact in the industry. This year’s TGS was dominated by exciting displays from Sony and X360, which attracted enormous attention domestically within Japan on the part of both gamers and the media.

We first attended as spectators in October of 2010. Ten years later, finally there as exhibitors, we felt it really was a new high in what’s been a great ride. We also see China really taking the world stage on the wireless and mobile games front, which feels great.

We exhibited our Android game development kit as well as two games for the platform, and learned a great deal about the landscape in Japan in the four days we were there. In this piece, I’ll share what knowledge we gained.

Build A Strong Base of Domestic UsersAt TGS, a common sight was queues, hundreds of people long, waiting to try out new games, usually for just a few minutes. Waiting times of 1 hour were common, with some lines stretching to the 2-hour mark.Girls have become the focus of game shows in China, with the games themselves almost taking a back seat. In Tokyo, the show girls are better selected and are presented more as decoration, but the focus is on the games. Taiwan-based Gamania put on a bikini performance this time, which attracted a good number of photographers, but the majority of gamers weren’t buying it.

It should be noted that Japanese gamers really invest, whether it’s in product knowledge, or techniques, or time and money that they are willing to spend on the games they like. Either way, games are huge in Japan, something that’s the dream of every country’s gaming sector. Dragon Quest flew off the shelves, with sales in the range of 3 to 5 million copies – equivalent to one copy for every 30th person in Japan. That equates to a total sales volume of two billion Yuan. Adding in another one to two million copies sold overseas, the total is closer to three billion. Classic games have become an art, and the gaming industry just keeps turning out better and better product.

Good Development of Human ResourcesA large part of TGS this time around was schools for game developers, which sharply contrasted with the large number of so-called training centers in China, many of which amount to little more than scams. These schools offer two year curricula that involve not only aspects of game development but also organization, user experience, game design, and other topics. They produce graduates with real, marketable skills.

Focus

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Good, Competitive ProductsWe saw good differentiation in core products held by the big names this time, in terms of genre, style of play, and artistic feel. This reduces copycatting and the stale feel it brings, helps the games compete on their own, widens the market, and increases profits in conjunction with potential fanbase. Konami came out with a dating sim for the NDS, Loveplus that features great locations and scenery as well as characters and interaction modes that really earned it some serious praise.

Hard Holes to FillJapan isn’t perfect, though. Costs are incredibly high, high to the point where we they have break-even points in the range of a million units for some titles. This is a country with more money, but it’s still an issue for developers. Furthermore, consumers have incredibly high demands, and the systems are becoming more and more complex. This increases dev time and adds corresponding complexity to the process. Their incredible lead over everyone else is waning slowly, and it would be hard to regain once lost. Right now is the best time in 25 years for foreign developers to get in on the Japan channel.

Of course, the above doesn’t apply to Nintendo. Those guys know what they’re doing, have excellent strategy, turn their weaknesses into strengths, and are all around bosses.

In these 10 years the Japanese game industry has grown in an immense way. They have done an excellent job, and we have a great deal that we can learn by looking at their path of ascension to greatness.

Square Enix’s Yoichi Wada said at the exhibitors conference: In Japan we’ve had great success taking our games to the global market. It’s been a task we’ve undertaken gladly, and thus I want to share this advice with our Chinese colleagues. Work hard. Make good games, and ship them abroad, too. I’d love to see you all succeed in this.

This section was written by Henry Zhang, general manager of Gallme. Gallme is a company focus on developing mobile application. Currently Gallme more focus on the business development in Japanese mobile market.

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10yuan.info is a fixed-price online commerce platform that went online in September of this year. All products and services for sale on the site are, of course, 10 Yuan in price, and payment is conducted through third-party providers. The network allows people to get their problems solved and see what skills they have that can be used to solve other people's problems, as well as pay and be paid for it. The range of services offered on the site is vast – as long as someone wants or is willing to provide a service and thinks it value, it can be posted. It's likely inspired by Fiverr, is blowing up like a firestone tire on the Alexa rankings, and is even seeing domestic clones now, such as Tenerer Link：http://www.10yuan.info/

Wiyun is an aggregate mobile services platform that caters to the greater China community of app and game developers, providing cloud services, including WiAd and Wigame, with new services in the pipeline already. WiAd as a platform follows trends in the advertising landscape and provides media and sales plans to clients. Through integration in mobile apps that plug into a proprietary groundbreaking data analysis system, the company provides high-quality services to advertisers and works to maximize profit for developers, as well as brings useful information to end-users. Link：http://www.wiyun.com/

Jingling.cn provides photo enhancement software for mobiles. It's incredibly simple to use and requires no special knowledge to operate. Users are able to remove wrinkles, enlarge their eyes, add various photo effects such as sheen or blur among other things for better photos of themselves. The download is free.Link：http://www.jingling.cn/.

Ruzuo.com is a site that applies the group purchase concept to movie tickets. People can view what showings are being "mobbed" by the site, usually on Saturdays and Sundays, and then organize groups of friends to attend. People can invite friends to the site and arrange meetup details – an exciting concept overall. Link：http://www.ruzuo.com

Tomsix brings the LBS concept to multimedia, with a number of special features. It currently supports iPhone, Android, and the Lenovo Lephone platform.Through the service, users can upload pictures and audio marked with GPS coordinates anytime, anywhere to share with friends and family. Like many other LBS ventures, the service can also be used to post one’s location and find nearby friends, restaurants, entertainment and lodging venues.

Link：http://www.tomsix.com/

Explore

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In September, we turned out focus to the creation of new products, and invited 4 excellent speakers to talk about their own experience with and ideas about developing new products, in accordance with user needs. Our guests touched on both hot points and weak points in the market, as well as the discovery and mapping of user needs, and the fine tuning and detail-oriented nature of finishing a product in order to put something out there that consumers will trust and stick to.

In the wrapup, speakers also touched upon the qualities, experience, principles, and objectives that leaders need to have to do these things, as well as shared some stories of failures and what was learned from them. Product histories and development paths were discussed, and dangerous pitfalls were pointed out.

NTALKS 群音荟 is an offline event organized by MOBINODE on a regular basis to tighten the connection among local start-ups, as well as a platform and community for grassroots and startups to demonstrate their works, share their experience and communicate with the potential partners and investors.

You can watch the event video hereReview

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Special Thanks to OrangLabs Beijing, BlueRun China and TrilogyVC

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