Market Insight

Valve partners Perfect World to bring Steam to China

June 13, 2018  | Subscribers Only

Chenyu Cui Chenyu Cui Senior Research Analyst, Games

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Perfect World announced that is working on ‘Steam China’, which indicates an upcoming official launch for the platform in China.  According to the agreement, Perfect World will actively promotion the launch and marketing of Steam China, while Valve covers software authorization and tech support. Additionally, Perfect World will be responsible for localization process of Steam’s game lineup in China. This partnership will not affect the pre-existing global operation of Steam.

This announcement has commanded great attention within social network sites across China, but this isn’t surprising given that the two companies have already had successful collaborations via the releases of Counter-Strike: Global Offensive and DOTA 2 in China. The extension of such a partnership means that more games with have an easier path into China, minimizing the risk of bans. However, this announcement suggests that the cooperation is aiming to establish a Chinese version of Steam, rather than extending the recent operations of Steam in China, which has raised concerns from legacy Steam users in China.

The key concern is region-locking. When CS:GO launched via Perfect World in China, Steam stopped sales of the game in the China store within its global platform. This means that the launch of a dedicated Steam China could generate access issues for Chinese gamers on Steam, and games on Steam China will need to face strict censorship hurdles, meaning approved games may be significantly different.

Valve has ambitions on the lucrative Chinese market, but there should be concerns about competition from Tencent. Compared to Tencent’s WeGame and other native standalone platforms for China, Steam’s advantage is its large userbase and immense game portfolio, but these advantages will not necessarily translate for Steam China. Atop this, WeGame is seeking to license more games for its platform, which has allows Ubisoft to bring Rainbow Six: Siege and other games to China. Tencent is diverting more resources to this market segment, meaning that fierce competition lays ahead.

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