If Facebook Goes To China, Games Would Win

Or tried to play Homefront.

One of the interesting things about China is the Great Firewall, which is the term for the Chinese government's efforts to block access to sites they consider subversive or bad for some reason. This includes such sites as Google and Twitter, and of course, Facebook. I experienced this first-hand while voyaging across China last month; it was odd and annoying to be denied access to social networking. Fortunately, once I boarded our cruise ship and used the satellite uplink, the Great Firewall was neatly circumvented. I'm sure tens of millions of Chinese would like to do that, too, but the government won't allow it.

Of course Facebook has been trying to get into the Chinese market, but China simply won't allow it. They are too wary of Facebook being used as an anti-government tool. China is in the midst of a crackdown on suspected activists and anti-government behavior, triggered by their fears that what's happening in the Middle East might spread to China. So it would seem like a difficult task to convince the government to allow in a social network being used in other countries as a way for people to communicate about their shared dislike of their government.

Still, word is that Facebook is looking for ways to make a deal with the Chinese. This would no doubt involve making big concessions to the Chinese government about access to information on people. No doubt, the Chinese government would want to be able to get full information about any Facebook user in China. This sort of data access is what led Google to abandon the Chinese market directly and move their site to Hong Kong, which though nominally ruled by China still has a great deal of autonomy. Will Facebook take a high moral stance, or will the lure of the enormous Chinese market be too much for them?

Assuming that Facebook is able to eventually cut a deal for access to China, what would this mean for games? China is obviously a huge market for games... it's set to top $8 billion in revenue by 2014, according to this study. That would make China 25% of the total game industry in 2014... and the US would only be at 22%. Ouch. As a point of information, Tencent took in $1.4 billion in revenue in 2010, followed by Netease at $749 million, Shanda Games at $680 million, and Perfect World at $374 million. They are all growing rapidly, too.

Facebook in China might change this dynamic; certainly it would affect Chinese gaming companies, who would be looking at having to adapt to a new platform or face some erosion of market share. This could open up huge new revenue streams for companies like Zynga, who have Facebook games that would likely be very popular in China. (Farming? Gambling? Yeah, those would do well... remember Farmville is huge in Asian countries that allow Facebook to operate.)

Even smaller developers who were able to quickly translate their games could see a big benefit. Facebook could see massive growth in China, and games would doubtless be a top usage of the platform. Keep that in mind as you build your social game titles; keep all those text strings in easy-to-find places in the code.