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CCTV Script 14/03/16


– This is the script of CNBC's news report for China's CCTV on March 14, Monday.

Welcome to CNBC Business Daily, I'm Qian Chen.

When the mobile game "Despicable Me: Minion Rush" launched in China, Eric Tan and his team at Gameloft were facing a challenge: Chinese gamers weren't spending their digital bananas.

To be precise, the players kept declining to "buy" more game time with the bananas, which they collect throughout the game and can also be used to upgrade characters. So Gameloft decided to let them purchase the time for one yuan.

Spending real money instead of fake money may seem strange, but Tan said the move significantly improved the title's in-app sales in the country.

That experience and others showed Tan that there is money to be made in "culturizing" games for China. Together with fellow gaming executive Craig Derrick, he founded Fifth Journey, a mobile entertainment company that aims to help Hollywood studios conquer China's booming gaming market.

In doing so, they join other developers hoping to wed China's love affair with American movies with the country's mobile game craze.

China is the biggest international market for U.S. movies, drumming up $4.8 billion in 2014, according to the Motion Picture Association of America. But now Hollywood wants to own handheld screens, too.

By the end of 2015, China was home to 420 million mobile gamers who spent a collective $5.5 billion, Niko Partners estimates.

"Hollywood knows that mobile gaming is a fast-growing segment, and Hollywood knows that the big part of the growth will come from Asia, mainly China," Tan told CNBC.

While the opportunities in China are immense, so are the challenges. Developers must contend with a high percentage of low-tech phones, data costs that are pricey for many consumers, and a fragmented distribution network made up of hundreds of app stores.

But in the end, it all comes down to adapting Western properties to the tastes of Chinese gamers, say executives.

Currently, Asia-based developers like Tencent, Gungho, and Netmarable command the charts by delivering content tailor made for the region, SuperData says.

Fifth Journey last month announced a partnership with Universal Pictures, Lionsgate Films, and MGM Studios to develop mobile games based on their properties (Universal's parent company is Comcast, which also owns CNBC).

The studios will give Fifth Element early access to scripts, and the publisher will use its experience to adapt games for Asian markets.

American movies that outperform in China provide good source material, said Tan. Last year, Fifth Journey partnered with Lionsgate to develop a game based on "The Expendables" series. While the franchise's earning power has slipped in the United States, its box office haul has grown in China.

Fifth Journey has also built an entertainment platform that integrates ticket and merchandise sales and streaming video into the gaming experience to help increase the time users engage with the properties.

China has also become a major market for movies based on comic book superheroes. San Francisco-based Kabam aims to leverage that trend by launching its hit fighting-strategy game "Marvel: Contest of Champions" in China this year.

Whether those investments will pay off remains to be seen, but developers are coming to the conclusion that success in China's gaming market will not come easy.

CNBC's Qian Chen, reporting from Singapore.

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