Although the VR industry is still in its early stages of development, it’s slowly building its foundation and establishing rules within an already well-structured ecosystem. If earlier years were focused on solving the problem of “existence,†the industry has now shifted toward deeper exploration in specific vertical sectors. For instance, in the realm of VR gaming, "distribution" has emerged as a keyword alongside the game itself.
When it comes to VR game releases, many immediately think of platforms like “Origin for CP.†Earlier this year, Aoying Network announced it had secured tens of millions in angel funding, primarily targeting the VR game distribution market, which was largely untapped at the time. Other ventures tied to VR releases include the content from CP TVR Time Machine, which quietly launched its PSVR overseas business.
In May this year, the VRCORE Hard Virtual Reality Developer Contest was launched, and it also revealed its acquisition of PlayStation global distribution rights, marking its entry into the publishing business. In June, Gamepoch announced it would handle global distribution and support for two PSVR games, “Rothland Planet†and “Dark Legion.†Touch Games also mentioned its plans for overseas VR game distribution… things are getting lively.
One might notice that while there are quite a few players on the "publishing" circuit, their goals align closely: either focusing on PC VR games or console VR games. While some may opt for both PC and console VRs, few teams are centered around "mobile VR game distribution" as their primary business direction. Thus, when it was announced that the next focus of Pangji Network would be on mobile VR game distribution, it truly caught people off guard.
What exactly is Pangji Network's strategy?
Previously, we’ve introduced Pangji Network to readers—it was established in 2015. Its core members hail from prestigious game companies such as T4Game TianTian You, KongZhi, and Kirin Gaming, with an average of over ten years of experience. Up until now, they’ve released nearly 20 mobile VR games, accumulating rich experience in connecting with major platforms. In May this year, Pangji Network secured 10 million yuan in Pre-A round financing.
Li Hongli, a partner at Pangji Network, told us that in the future, they plan to walk on both legs of self-developed games and product releases. Regarding mobile VR game distribution, Pangji Network primarily helps domestic and overseas CPs connect with domestic mainstream platforms, adopting a cooperative sharing model. For particularly high-quality content, they offer certain copyright fees and technical support. Currently, Pangji Network has begun introducing overseas products like “Lila's Tale†to domestic platforms, with plans to continue introducing a variety of overseas premium mobile VR games. Li Hongli expressed optimism about the development of mobile VR, stating, “(Mobile VR game distribution) this path has the potential to achieve profitability.â€
While the concept is promising, it remains untested in practice. To seize this opportunity, we might consider discussing a few small questions: Can the mobile VR game release route succeed? How should it proceed? Who will take it on?
What are the pain points in the mobile VR game market?
Traditional game markets are well-established with clear divisions of labor. Mobile VR game releases remain a relatively blank market. Even PC/host VR games and offline distribution are still in the experimental phase. Fang Xiangyuan, co-founder of TVR Time Machine, described this typical scenario in an interview with the media:
CP is envious: “Ah, Sony Dafa is great, but why is it so troublesome?â€
PSVR scratches its head: “Come on, come on, but why is it so complicated?â€
The same applies to mobile VR. It can be described in three dimensions:
CP: “Development costs are too high. Why are there so many platforms? The input-output ratio is too low, so let’s just do business on the B-side.â€
Channel: “Where is the good content? Where are the small and medium-sized CPs and overseas CPs? Show me!â€
User: “Wow, this shooting game is cool! Wow, this shooting game looks similar to the one you just showed me! Wow… it’s still a shooting game?â€
In other words, there’s serious information asymmetry between content creators, channels, and users.
Is it reasonable to release mobile VR games?
This problem doesn’t seem significant when applied to PC or mobile games. However, the issue of mobile VR games stands out. Some people are skeptical—Is the market big enough? How many people can sustain it? The entire world isn’t driven by altruism. If the VR industry is merely a new technology and industry without any profit potential, why are so many entrepreneurs and investors flocking to it?
Ultimately, the reason everyone focuses on PC VR games may be straightforward—“Raw Data†is profitable, and the same goes for console VR games. Despite the tragic situation where countless content providers struggle to generate revenue behind the profitability of one or two successful games, it proves that VR games can indeed be profitable. This is sufficient.
PC/host VR games can be profitable, so mobile VR games could theoretically succeed, given a standout title.
Pangji Network’s Li Hongli tells us, “Mobile VR has already shown profitability. Mobile VR has a large number of users, including a significant number of high-quality users. As long as the product quality is good, profitability is achievable.†In other words, the mobile VR market already has the potential for profitability, which is the root cause for Pangji Network to choose mobile VR games as their business focus.
There’s another key question: Is the mobile VR market large enough? A recent report on mobile VR circulating in the industry may provide the answer.
The report shows that in 2016, global downloads of VR applications and mobile games on the App Store and Google Play reached approximately 226 million times, a year-on-year increase of 276% compared to 2015. In the first quarter of 2017, the total number of mobile VR software downloads across the two major stores exceeded 85 million, increasing by 205% from the first quarter of last year. From January 1, 2015, to March 31, 2017, cumulative downloads of VR-enabled mobile applications in the two largest stores worldwide reached approximately 371 million.
Despite the exponential growth rate of mobile VR, the figure of “371 million†alone is enough to demonstrate the immense potential of the mobile VR market. The domestic VR game industry hasn’t yet reached a certain scale, with CPs still struggling. Can distribution be done? The answer from Li Wei, the overseas head of Touch Games at GDC, may represent the views of many: “VR mobile content will quickly flood all areas, especially in mobile games with strong fluidity, and its commercialization is only a matter of time.â€
Can mobile VR games make money, and will there be food for mobile VR games?
What do you want to do with mobile VR distribution? Who will do it?
For mobile VR games, it’s hard to define what constitutes a publisher or what exactly a publisher should do—
Does content CPs handling platform connections count as publishing?
If a channel connects platforms and CPs, is that considered publishing?
So, what can a publisher do to be called a distributor?
Undoubtedly, all boundaries are ambiguous until the industry matures. However, as we mentioned earlier, the market information for mobile VR games is asymmetrical and requires a publisher role akin to a “broker.†Regarding the issue of what mobile VR distribution should do, we’ve also interviewed many content teams. We might find some answers in their needs.
Connecting with China’s platforms is a labor-intensive task. We need a team to help us accomplish this (from an overseas CP);
High development costs, if the distributor could subsidize development fees, our pressure would be significantly reduced (from a domestic CP);
It’s definitely hoped that the process is efficient and effective (from a domestic CP);
Selecting high-quality teams and content from CPs, providing certain capital/technical support to CPs, quickly optimizing products, connecting with various content platforms, and ultimately maximizing the value of a particular product—this might be one way VR distribution should operate.
It’s not difficult to come up with such an answer: To excel in mobile VR game distribution, at least the following conditions are required—
Understanding VR, being able to narrow down options and filter out high-quality content;
Having the technology to quickly optimize products;
Understanding the market, understanding market demands and user needs, and having unique insights into industry preferences;
Having funds to support CPs and prepare for the day when the industry achieves large-scale profitability.
Therefore, mobile VR games can be distributed, but it must be done by “teams with experience, technology, capital, and strength.â€
Adding some supplementary details to reach the 500-character mark:
In conclusion, the future of mobile VR game distribution is promising but challenging. While the market holds immense potential, it requires strategic planning, robust partnerships, and innovative approaches to overcome existing hurdles. The industry is ripe for the right players to step in and shape its trajectory.
Jiangsu Qilong Electronic Technology Co., Ltd. , https://www.qilongtouch.com