The most severe problem Chinese mobile phone application and game developers meet is homogenization and irregular competition.
Apple Inc. AAPL triggered the yuan domination and settlement functions of App Store in the Chinese mainland on November 18. In addition, a recharge function was launched and the amounts including CNY 50, CNY 100, CNY 300 and CNY 500 from any commercial lenders in the market are allowed. That is to say instead of the US dollar, consumers in the market are allowed to pay for applications and games at the online store with renminbi currently.
It is good news for not only consumers of iPhone or iPad but also iOS application developers there. According to the latter, the bad debt ratio of revenue bills the US consumer technology giant sent to them for September this year sharply rose to over 45 percent, compared to not higher than 20 percent in the past. The ratio has a close tie with the so-called giftcards and currently, such giftcards can not be used. In addition, payments with foreign credit cards are banned. Thus some industry observers believe that the revenue of mobile phone application and game developers in the market will rise to a large extent. However, in some others' opinion, the most severe problem they meet is homogenization and irregular competition.
Chen Haozhi, CEO of Punchbox, developer of famed mobile phone game Fishing Joy, pointed out that actually the bad debt ratio of domestic mobile phone application and game developers rose sharply from July and August this year. It was a fact that the ratio once reached up to 88 percent, however only one of them suffered the phenomenon. Actually, the most severe problem they meet was homogenization and irregular competition. For instance, among App Store's top 100 games in the Chinese mainland, six to seven ones were similar to Fishing Joy. Fishing Joy always topped them and this indicated that developers of them expected to make money through simply copying others. The competition was fierce and provided that a developer fails to turn out some masterpieces, there was little possibility for it to gain pretty revenue, let alone investment from venture capital firms.
In line with a report by IIMEDIA Research, China's mobile phone game market is challenged by homogenization now and the number of popular games and copycat versions each accounts for 1.9 percent and 21.8 percent of the total at the APP Store. However, Chen thought highly of the market and he believed that as Apple triggered the yuan domination and settlement functions in the Chinese mainland, more premium mobile phone application and game developers would stretch out reach to the market.