Mainland mobile games developer Shenzhen Tencent Computer Systems (STCS) last week signed an exclusive deal with Bbmf, a start-up headed by Chinadotcom chairman Peter Yip's son, Antony Yip, which will give the smaller firm access to more than 100 million users. Under the four-year deal, STCS will distribute Bbmf's Java-based mobile games licensed from South Korea and Japan. STCS, with links to China Unicom and China Mobile, is the largest mobile content provider in China by revenue. Its QQ instant messaging service has more than 100 million users. 'It's really important for us to work with big players like Tencent because they have the distribution network while we concentrate on the games,' said Mr Yip, chairman and chief strategic officer of Bbmf. Since Bbmf's launch last year, it has signed licensing agreements with Japanese and Korean mobile game companies for distribution into China. It now has more than 86 licensed Java-based mobile games being converted to support the mobile phones used on China Mobile and China Unicom networks. The start-up faces many difficulties. Unlike in developed markets such as Japan and South Korea, mobile gaming has not yet taken off in China. Short messaging services-based applications and games are the closest to mobile gaming in the country. The Japanese and Korean games being localised by Bbmf have high-quality graphics supported only on high-end colour handsets with large memory. Most Chinese mobile phone users still use voice-centric, monochrome handsets. Han Lian, co-founder of Bbmf, says the mobile gaming market in China is still in its infancy, but there is a growing middle class willing to spend on entertainment. 'It is important we get an early start. If you are a PC gamer, you would not want to play with poor graphics on a mobile phone. You'll want to play with highly sophisticated games with good graphics, and that's what we have,' he said. Many mainland start-ups produce mobile games for the domestic market or are localising games from Japan and Korea. Analysts warn that the mobile gaming industry is heading for the same fate as the dotcoms did in 2001. Many start-ups hope to build up business to a stage where they can sell their products to Chinese portals such as Sina.com or to network providers like China Mobile. Nokia is also building up a gaming developer base for its NGage handsets.