Are Dutch game developers naive?

During the past days I was among others in the Dutch city of Utrecht to attend the Nederlandse Gamedagen (Dutch Gaming Days), a two-day conference about gaming. Although most of what was discussed there is not relevant for this blog, I noted a few things that I would like to mention. One of the themes that was discussed during the conference was internationalization, something that really interests me. But the panel discussion was not what I expected from it.

Two Dutch game developers, a professor and two Americans that run a game studio in Holland, discussed the current and future trends of game development internationalization. These guys should be business people, but to me they sounded incredibly naive. Which countries do you think they see as a threat in terms of competition? Canada and France, not countries like China and India. And what should be done about that? The Dutch government should subsidize game developers so they can be more competitive… Come on guys, if you need subsidies you’d better close down your company and choose a different line of business.

China and India were mentioned, but they felt these countries are no threat. According to them companies there are not as creative, so they are no big danger. True, but things change incredibly fast. So don’t be fooled by believing this will stay like this. Furthermore, and this really made me laugh, they said that a 20-30% lower price in these countries would not be sufficient for game publishers to make their games there. First of all, 20-30% is a lot of money, and most business people would be very interested in finding a partner that can reduce their purchasing prices by this amount. But the fact is that prices in China are probably 50-60% lower than prices in Holland (and sometimes up to 80% lower – I know this from my own experience). There is no way Dutch game developers can survive in a price battle against China. Their argument that salaries in China are catching up fast is also totally wrong: of course salaries grow fast, but it will take decades to bring them at the same level.

If I look at Zlong Games (the company that was bought by Spill Group Asia a few months ago) for example, they produce at least the same quality products as the Dutch studios. But until now they were not very competitive in the international market. Because of cultural and language barriers, but also because they did not have the right contacts outside China. We put an experienced foreign sales manager in their company, and I am also helping them in their day-to-day business with foreign clients. The management of Zlong Games is very smart and learning incredibly fast, so they might not need me anymore one or two years from now. And that’s my goal of course, they should learn from us and then do it themselves. Their prices are much lower than what Dutch studios will ever be able to achieve, and they will stay much lower. And this is just one company (although a top one), I know many more that could achieve the same. Watch out Dutch game developers!

Running in the rain

Last night I arrived in Holland for some business meetings. This time I went with two colleagues from Spill Group Asia, Demi (marketing director) and Han Bing (GM of Zlong Games). We had a quick dinner upon arrival in Hilversum (dim sum in a Chinese restaurant), and after that I wanted to do some work. However, I was suddenly so tired that I decided to get some sleep and get up early. That was probably a good idea, because when I watched the 10 PM news in bed instead, I fell asleep during the newscast already.

So I got up at 4 AM to scan through all the mails from Monday, and managed to finish this by 5:30 AM. Then I put on my running gear, and went for a run. Outside it was still pitch dark and it was completely silent. Although it was raining and quite cold (around 7 degrees) I found it very beautiful. First I ran around the Hilversum city center (I always want to know exactly where I am) and then decided to run to Lage Vuursche. But halfway there it was so dark in the woods that I decided to go back to the main road and run to Baarn instead. It was still very quiet and I ran on the bike lane next to the road. That was covered by leaves, and together with the rain it was a very nice environment to run.

Close to Baarn the rain stopped, and within 10 minutes the sky had cleared completely. I saw the stars in the black sky, something you cannot see in Shanghai (you are lucky to see the moon!). On the way back I passed by castle De Hooge Vuursche. With the start-filled sky above it and the dark woods behind it was an amazing sight.

The running went excellent, probably also because I did not run outside for a few weeks, and it felt great. I got back to Hilversum in just over 1 hour and 30 minutes. I could feel all muscles in my legs (I am not used to run on asphalt anymore), but felt very fit. A great start of the day. I am going to have breakfast now with my colleagueas, and then I am ready for my real working day!

Autumn

Suddenly it’s getting cold in Shanghai, yesterday a cold front arrived and the weather has changed completely. Today’s high should be 17 degrees, but to me it feels more like 10 degrees Celcius. It seems autumn has finally started, with continuous rain since early this morning and a dark grey sky. It’s just past 4 PM and it’s already getting a bit dark outside. In a way I like it, it has been warm too long already, and I can finally start wearing winter clothes again.

But I don’t envy all the people that try to hail a cab on the streets. If it rains in Shanghai everybody all of a sudden wants to take a taxi, and as a consequence none are available. While driving to work this morning a taxi stopped in front of my car to let a person out. Right away a young guy and a middle-aged woman came running to the cab and started to fight who could take it. The young guy won, because he just jumped in and slammed the door shut. The taxi took off right away, leaving the woman standing in the rain. I felt bad for her.

007's first time in China

“Casino Royale”, the latest James Bond movie will open in China on January 30 according to the Shanghai Daily. Nothing special you might say. Except for the fact that this is the first time a James Bond movie is allowed to be shown in Chinese theatres. According to the Chinese film authority the reason is that the film’s content is clean: “no playboy Bond and no bikini clad leading actresses”. This seems like a boring 007 movie to me.

But whether the film is allowed or not allowed in theatres, it does not really matter. If the movie will only be screened in 9 or 10 weeks from now, everybody will have seen it on DVD already. I have not seen the movie yet on the shelves, but I am sure it will be at my favorite shop very soon. Next to the special box with all other 21 James Bond movies that never made it to the local cinemas.

Postal inflation

Mailing a letter is still very cheap in China. Until today mailing a local letter set you back only RMB 0.6 RMB (EUR 0.06) and a nationwide letter just RMB 0.8. But it seems China Post is not making enough money, because as of today they have increased their prices. And not just by 1 or 2%: local mails go up 33% and the price for nationwide letters increasing by a whopping 50%!

I hope China Post’s service will also get a bit better, but I fear this is wishful thinking. Anyway, I never use the quite unreliable mail service, except for receiving letters and packages from abroad that have been opened. When I need to send something I either use a courier, so you know for sure your letter or package will arrive (without being opened), or otherwise I use good old free email.

Chinese IT venture capital booming

According to today’s paper version of the Shanghai Daily venture capital investments in mainland China are booming. The newspaper refers to a recent report by Dow Jones VentureOne and Ernst & Young. The total investment in the first 3 quarters of 2006 is almost as much as last year’s total of US$ 1.2 billion. In the 3rd quarter the year on year growth was close to 50%.

Most investments are early-stage investments (about 60%), but the article notes that these start-ups have already achieved a level of business maturity that surpasses their US venture-backed counterparts, according to a spokesman of Ernst & Young. 22% is already profitable, compared with only 7% in the US.

IT investments (excl. internet) add up to a little less than 2/3rd of all VC investments, and internet-related companies are about 1/3rd of the total. There were also a few investments in the energy sector. The average investment size also increased, to about US$ 5 million (median figure).

Mobile Monday Shanghai

Tonight I went to the second Mobile Monday event in Shanghai. During the first Mobile Monday I was in Europe so I could not join, but this time I made sure I could attend. The event was held in Kathleen’s 5, actually a bit of an upclass location for an IT event, but it also gives it some style. For those who don’t know the place, Kathleen’s is an excellent restaurant on the top floor of the Shanghai Art Museum, overlooking People’s Park. I suggested to Bruno Bensaid (one of the organizers) to use the Tudou office for one of the next events, that saves them some money and it’s more Mobile Monday-like.

There were three presentations, all related to user generated content (USG). Fred Yu, CEO of Waptx.com (Wap Tianxia) kicked off. His company is a mobile portal, where people can upload their own content and others can comment on it. According to his presentation, his site has 70 million page views per day, which seems a bit too much considering that he ‘only’ has 400K unique IP’s. Anyway, maybe a typo. A very interesting company, that seems to know how to do things right in the Chinese market.

Then Mu Rong took the stage, the CEO of PepTalk. This is a mobile IM service, based on an IP based network. For non-techies, you can do a lot of things with your phone, and you can do it virtually for free over a wireless network. Some of the examples he gave seemed a bit farfetched to me, such as a user who reads all her news on PepTalk while on the bus to school. Since when do buses in China have wifi? Or does she first download it all before leaving home. Or maybe I just misunderstood his concept. Anyway, if it works like he says it works it can be big as well, especially after 3G will be launched.

The last person to present was Sam Flemming, CEO of CIC Data. His company is not directly mobile related, because it does data mining of China’s BBS and blogs for corporate clients. So if you are Motorola for example, CIC Data can tell you exactly what is being said and written about your brand on the Chinese internet. Not a typical dot com start-up, but one that builds on the USG on the Chinese internet. A fast-growing company with a lot of potential.

After the presentations there was a panel discussion. Because Fred Yu had to leave early, I was asked to take his place in the panel and tell a bit about Tudou’s experiences with USG. We had some good questions from the audience, and the concensus was that mobile internet will have a very interesting future, with lots of new applications. If you plan to do a start-up in China, this is an area you should look at in my opinion.

The evening was concluded with some drinks and a bit of networking. Because I was on the panel, several people came to me to introduce their start-ups. I heard some interesting ideas, and will check their sites over the next couple of days. A well-organized event, glad I took the time to go here tonight.

Spill Group Asia weekend in Anji

This weekend Spill Group Asia and our new colleagues from Zlong Games went on a company outing. We left on Friday afternoon by bus to Anji, a city in the mountains of Zhejiang. The place is famous for its nature, especially for its huge bamboo forests. It actually turned out to be close to Moganshan, where I spent last weekend. The trip by bus was about 3-4 hours, but it seemed a lot longer: the tour guide that was provided to us kept on talking and talked so loud that my left ear (that was right below the loudspeaker – which was not functioning well) was literally hurting – I can still feell it now! Luckily he did not talk the whole way, but it certainly seemed like it.

We arrived in Anji just before it got dark, and made a short trip to the set of the movie The Banquet. From there we hiked up to a viewing point, from where we overlooked a sea of bamboo trees. As far a you could see only mountains full of bamboo forests. A beautiful sight, but we could not enjoy it long because it got dark and we had to leave the woods.


When we got back to the entrance of the park, dinner was ready. Some nice local dishes with lots and lots of local beer. The beer was called bamboo beer, but I am still not sure if bamboo is one of the ingredients (anybody knows?). It tasted a bit sweeter than my usual Tsingtao or Heineken, but was not bad. During the dinner many colleagues decided to toast with the management, and I was one of the victims. I had to drink several glasses of beer ganbei (drinking it empty at once), but because the bamboo beer was quite light it was not a very difficult task.

The dinner was followed by a bonfire (the second in a week for me), in an open area in the woods. We did some games, and the losers had to perform for the group. During the bonfire I received an email that Peter Driessen just got a new son, so I could annnounce that to the whole group. Peter, if you read this, congrats from all of us!


The night we spent in a hotel in Anji, which turned out to be much better than expected. Even the breakfast the next morning was quite OK (I had a bit of a hangover from the bamboo beer, but the greasy fried noodles made me feel much better). The only thing I did not understand is why they served hot orange juice. When we asked if they had cold orange juice the waitress brought us some ice cubes!

We spent the whole next day enjoying the nature outside Anji. First we hiked up a mountain, which was much higher than I expected. But the view from the top was fantastic, and the walk was a good opportunity to talk to some colleagues that I did not know very well yet. After the hike (almost 2 hours up and 1 hour downhill) we had lunch at a local restaurant, before we drove to a river close to Hangzhou. Here we went rafting on bamboo (what other material can you expect here?) boats. It was a nice ride, especially because the weather had cleared up completely and it had become nice and sunny with a blue sky. The water was quite calm due to a lack of rain, but the water pistols that many colleagues had brought ensured that we all got soaked anyway.
The day ended with the drive back to Shanghai. The whole bus was watching The Banquet and Crouching Tiger Hidden Dragon on the internal TV, but I decided to catch up on some sleep. All in all a nice weekend in a beautiful scenery. I had not been to Anji before, and it’s definitely a good place to visit for a weekend trip from Shanghai. The hotels are decent (much better than Moganshan), and the nature is stunning. Some valleys that we drove through reminded me even of the European Alps, although the mountains are much older here (=less steep). There are even one-day organized trips from Shanghai, but considering the distance you will likely spend more time on the road than in nature. If you want to go by car, the quickest way is to take the expressway to Hangzhou and then take the ring road (at exit 18) until you hit the expressway to Nanjing. From there you should see signs to Anji.

More pictures from the trip you can find here

Flu shot

Yesterday afternoon we had internet problems in our office, several hours without internet thanks to China Telecom. This really hinders my work (an understatement), therefore I decided to do something else, and work from home at night. So I drove to the hospital to get a flu shot, something I had planned to do for two weeks already, but never found the time to do.

Last February I came down with a pretty nasty flu, and had to spend most of Chinese New Year week in bed. I don’t like laying in bed, because it’s a total waste of time. But I was so sick that I did not even realize I was in bed most of the time. Kind of scary, I cannot remember I had ever been so sick before. At least I was lucky that it happened during my vacation, instead of during a normal working week (although now I could not go skiing, which is also a pity of course). But in order to avoid the flu this year I decided to get the flu shot.

The nice thing of living in Shanghai, is that there are private clinics that you can go to. You just call them and you can come right away. No waiting time, friendly staff and good English speaking doctors. Not cheap of course, but I don’t mind paying for good service (and my insurance normally pays most of it anyway). I normally go to WorldLink, they have several clinics in Shanghai, and I am quite happy with them.

The flu shot itself was a two-minute thing, but I am having some side effects now. My shoulder is sour, and I am feeling a bit lousy. But this should go away within 24-36 hours, and then I’ll hopefully be protected from flu for the rest of winter (knock wood!). Well, as long as bird flu does not reappear of course. But I am not too afraid of that: that was a typical media scare, and the journalists are too busy writing about global warming right now (finally).