Alibaba mobile game plan to benefit large Chinese developers

E-commerce giant Alibaba's foray into mobile games and its generous revenue-sharing plan spell good news for the mainland's top listed online game developers but is expected to have minimal impact on market leader Tencent.

Perfect World, NetEase, Changyou.com and Shanda Interactive Entertainment, which are all listed on the Nasdaq, and the New York-listed Giant Interactive were expected to be among the major beneficiaries of the Alibaba initiative, analysts said yesterday.

Alibaba unveiled on Wednesday plans to soon launch its own mobile gaming platform as part of a broader strategy in the mainland's burgeoning mobile sector.

The new platform will offer game developers 70 per cent share of sales, while Alibaba will take 20 per cent to cover the cost of distribution and marketing. The remainder would be donated to a charity fund for children in the mainland's rural areas.

A Barclays research note published yesterday said mobile game platforms would need to change their revenue-sharing schemes because of Alibaba's plan. Qihoo Mobile Assistant and 91 Wireless, for example, typically take a 50 per cent share of sales after paying telecommunications carrier fees. Other platforms pocket as much as 70 per cent.

Alicia Yap, the report's lead author and head of China internet research at Barclays, said: "If Alibaba's mobile game platform succeeds in becoming a meaningful distribution platform, it would be positive for mobile game developers … [including] publicly listed online gaming developers."