@TBBle thanks for the color on PW. It prompted me to take a little bit closer look.
I looked up the quarter and annual reports for Perfect World Co, LTD.
They don't report their total aggregate players, so it's hard to figure out the exact conversion rates. However, there are still some data in their financial reports.
This is from their 2010 Q3 report.
The aggregate average concurrent users (ACU) for games under operation in mainland China was approximately 733,000 in 3Q10, as compared to 886,000 in 2Q10 and 713,000 in 3Q09. The active paying customers (APC) for games operated in mainland China under the itembased revenue model was approximately 1,274,000 in 3Q10, as compared to 1,433,000 in 2Q10 and 1,643,000 in 3Q09. The average revenue per active paying customer (ARPU) for games operated in mainland China under the item-based revenue model was RMB323 in 3Q10, as compared to RMB292 in 2Q10 and RMB266 in 3Q09.
Their ACU is pretty high compared to actual number of paying customers. This implies a fairly low conversion rate, but impossible to determine the exact %. However, once the customer pays, the amount is pretty respectable at 323RMB ($50) / user.
I skimmed through their Annual report for 09 and it looks like only Perfect World (released 3 years ago) charged by amount of time played. Every game after that went to an in-game payment system for items. Paying for items is much like how we see IAP in the App Store eco-system.
From their annual report for 2009:
We use a time-based revenue model for our first game, Perfect World, under which we charge players based on the time they spend playing the game. We use an item-based revenue model for our other games under which players can play the games for free, but they are charged for purchases of in-game items, such as performanceenhancing items, clothing, accessories and pets. In 2007, 2008 and 2009, 93.7%, 97.2% and 98.5%, respectively, of our online game operation revenues were generated through this item-based revenue model. We distribute our physical and virtual prepaid game cards to players in China through a variety of channels, consisting primarily of a network of 35 third-party distributors of our physical cards and two national distributors of our virtual cards.
It's hard to really draw any conclusions from this except that it is possible to make money from the Chinese gaming market with the right model. iOS in China is still very new, but from the latest Apple earnings report, YOY growth in that region is higher than any other region. We may not be able to capitalize on it right away, but for those of us not doing this as a hobby, it's something to consider.
@letmeknow
I agree that without living in the country, it's really hard to pin down the tastes and trends. Even the art styles are subtly different than what's popular here.
iPhone owners are generally pretty well off (average is over $100k in annual income). I think even more so in China because the price is the same, but income levels are different. If anyone has the spending power, it's those that can afford an iPhone.
Finally, the OP asks if it's worth it to invest in the Chinese market. I'm also hoping maybe someone will chime in with their experience with an iOS game in China.
