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Every week, our analysts review dozens of news sources, from multiple countries, in multiple languages. From this, we give you the stories that are most important, and the analysis to tell you why.
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China Issues Broad New Rules for Web
New regulations were announced in China this week, aggregating several existing policies to ease in enforcement of rules governing online publishing. According to an article in The Wall Street Journal, the new regulations-jointly issued by the ministry of information technology and the publications regulator-ban companies with foreign ownership of any kind from engaging in online publishing, though they allow foreign-invested firms to cooperate with Chinese companies on individual projects, as long as they obtain prior permission from authorities. All content published online-including text, maps, games, cartoons, and video and audio files-must be hosted on servers inside China, according to the rules. Posted online this week, the rules are set to take effect on March 10 and require all involved in online publishing to receive a permit to do so. However, nothing too new or different from existing policies was announced.
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Kunlun Wanwei to Release Clash Royale in China
Kunlun Wanwei just signed a licensing agreement with Supercell to exclusively publish the Chinese Android version of its upcoming new game Clash Royale in China. The Chinese iOS version will be launched in March, which is the same time that the game is scheduled to be launched globally, while the Chinese Android version will be launched in April. Clash Royale's performance during soft launch in limited countries has shown that it may very well become the next blockbuster on mobile platform after its global launch.
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This will help put into perspective the sheer power of Tencent's WeChat: During the Chinese New Year holiday period in early February, WeChat had more mobile transactions than PayPal had throughout all of 2015. Tencent says that there were 8 billion red envelopes sent via mobile WeChat during that holiday period, which is a much bigger number than PayPal's total transactions of 4.9 billion in 2015. According to a post in TheDrum.com, the most common value was RMB 8.88 ($1.35) because 8 is a lucky number in Chinese culture.
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Kung Fu Panda 3 generated $144 million in China from launch on January 29th through February 21st, and was approved to extend its showing by 30 days. It might become the highest grossing animated film ever in China. Meanwhile, in addition to Chinese themes such as in KFP3, Chinese theater-goers gravitate toward homegrown films such as Stephen Chow's The Mermaid. Between February 8th and February 20th the movie generated about $381 million in China.
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Perfect World will be financing at least 50 Universal films over the next five years through Perfect Universe Investment Inc, and in return will get a 25 percent share of the films it funds. The deal is mutually beneficial - Perfect World Pictures will help facilitate Universal film distribution in China while enabling Perfect World to expand its presence internationally, on top of acquiring online gaming company Perfect World for 12 billion in January. Perfect World already began expanding in North America years ago with the purchase of majority stake in Runic Games in 2010 and the acquisition of Cryptic Studios in 2011. Perfect World Entertainment, the North American branch of the company, also operates games by Blacklight Retribution (developed in Seattle, USA) and RaiderZ (developed in Seoul, Korea).
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News from Sinocism
Mindsets for Thinking about Innovation In - and Competition from - China - Andreessen Horowitz Whatever else one thinks of China, we need to accept that: Chinese companies are truly innovating, not just copying - if not in tech, then certainly in product, path to market, or monetization; Chinese companies are hyperscaling more intensely than U.S. counterparts because the TAM is much larger; Lots of Chinese companies are getting funded and competing in a super intense way (through a combination of long hours and "we're at war" mentality) - so winners will emerge very strong; and Chinese companies can serve as both a source of inspiration in the short term and as a formidable source of competition in the future (and part of the art of partnering with them is realizing this; more on that later).
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Niko News is just one part of the strategy and expertise offered by Niko Partners to help our clients better understand and successfully navigate the thriving games markets of China and Southeast Asia.
Niko Partners is the leading provider of market intelligence, custom research, and consulting services focused on the games industries in China and Southeast Asia. Since 2003 we have provided critical information to the world's leading game publishers, developers, hardware makers, and game service providers as well as to government policymakers, trade associations, and institutional investors.
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