Parallel Development in the Chinese Gaming Industry: An Overview

In the gaming industry, "parallel development" refers to a method of working on several projects at once to improve success rates and reduce risks associated with game development. The game industry has seen an increase in the popularity of this strategy, especially among well-known Chinese companies like Tencent and Netease, which have led the way and encouraged other major corporations to imitate them.

The reason behind this widespread adoption of parallel development is driven by the maturity of the industry and the growing competition in the market. With paid user acquisition costs increasing, the return on investment (ROI) required for games has become higher, and as a result, the success rate has become lower. Parallel development allows companies to diversify their portfolio and spread out risk, in order to increase the likelihood of having a successful game and avoid the risks associated with relying on a single project.

Examples of Parallel Development in the Gaming Industry

One of the most notable examples of parallel development in the gaming industry is Tencent's Honor of Kings. Tencent is one of the largest gaming companies in the world, and Honor of Kings is one of its most successful games. Before its success, Tencent had developed multiple games within the same genre as Honor of Kings, in order to increase its chances of success.

Another example of parallel development can be seen in the strategies of Elex and Funplus. Both of these companies are well-known for their popular 4X mobile games, and they have both used parallel development to increase their chances of success. For example, Elex has developed 20 plus 4X games within the same genre, while Funplus has created multiple 4X games with minor innovations to reach to broader audiences. Similarly, Paper Games is developing three Open World Action RPG games simultaneously right now, while Lilith is working on multiple 4X + X and RPG games. 37 Games invested over 20 projects a year, while Century Games, IGG does the same thing. Even a decade ago, Tap4Fun, iFree Studio was developing more than five 4X games at the same time to increase its chances of success.

Benefits of Parallel Development

Parallel development has several key benefits for gaming companies.

First, it helps to spread out risk and reduce the risk of failure. By having multiple games in the market at the same time, the company can increase its chances of success and ensure that it continues to generate revenue, even if one of the games doesn't perform as well as expected.

Second, parallel development allows companies to explore different creative avenues and test new ideas. By working on multiple projects simultaneously, the company can try out new game mechanics, explore different market segments, and experiment with different monetization strategies. This can help to keep the company's games fresh and innovative, and increase the chances of success in the long term.

Third, parallel development can help companies to respond to market trends more quickly and effectively. By having multiple games in the market, the company can gather data on player behavior, identify trends, and adjust its strategies as needed in real-time. This can help to optimize the development process and increase the chances of success for each game.

Challenges of Parallel Development

While parallel development has many benefits, it also has its challenges. One of the main challenges is budget control. When working on multiple projects simultaneously, it can be difficult to manage costs effectively and ensure that the company remains profitable and sustainable. Companies must carefully allocate resources and monitor spending throughout the development process in order to stay on track and keep costs under control. In recent years, many companies such as 37 Games, Funplus, Lilith Games, XD Networks, and Tiktok, have invested heavily in studio expansions, which has consumed a significant portion of their capital. However, after so many years of experience with parallel development, these companies have honed their project shutdown processes, which allows them to cut down costs by cancelling underperforming projects. As a result, the cost of working on multiple projects simultaneously has never been multiple times the cost of working on a single project, since the projects lost their battle will be terminated early.

Another challenge of parallel development is ensuring that each project is given the attention and resources it needs to succeed. When a company is working on multiple projects simultaneously, it's important to ensure that each project is receiving the attention and resources it needs in order to succeed. This can be difficult to achieve, especially if one of the projects is experiencing unexpected delays or setbacks. The company must be able to balance its resources effectively and adjust the allocation of resources as needed in order to ensure that each project is given the support it needs to succeed. Last time when I having a breakfast with a founder of these comapnies, he told me he was exhausted. I wished him good health.

Conclusion

Parallel development is a strategy that has become increasingly popular in the Chinese gaming industry for last 10 years, and it can offer many benefits for gaming companies looking to increase their chances of success. By working on multiple projects simultaneously, companies can spread out risk, explore different creative avenues, and respond to market trends more quickly and effectively. However, it's important to be aware of the challenges of parallel development, including budget control and ensuring that each project is given the resources it needs to succeed. Nevertheless, when executed effectively, parallel development can be a powerful tool for companies looking to increase their chances of success in the highly competitive and rapidly evolving gaming industry.

However, this strategy is not as prevalent in the western gaming industry. Why? You tell me.