In a recent article about the Chinese game industry, this author discussed how the companies have focused on simple mobile games and browser based computer games. Internationally, the game industry is more diverse.
As the article explains, “This has been a potential concern for investors in Chinese games companies, both in terms of international growth potential and a concern that Chinese gamers might follow a similar trend away from these simpler games. We are now seeing some signs that Chinese games companies are not just aware of this potential, but are indeed looking to develop in that direction.”
The article explains why the changes in the Chinese game industry have investors interested. As he said, “It implies potential international upside potential, and perhaps expansion plans in the not too distant future. While this may sound all well and good, investors need to take a cold hard look at whether or not they think the company’s finances can handle such a strain. Going international, while to my mind almost a necessity in the long term, is also unlikely to be free or easy. It will take some tinkering to get it right as well, as we have seen with many other Chinese international expansion efforts. Look for some stability with a decent war chest and promising free cash flow to help stave off panic responses should the first efforts fail.”