Innovation outside Silicon Valley?

Anyone working knows about his own industry. The problem is that when asked about the latest trends and innovations, most people would come up with the same answers. This is what you get when reading mainstream media, attending most conferences and talking with peers. Eventually, all tend to agree and hardly anything disruptive or original emerges. While the world is looking at Silicon Valley, learning from the US in addition to their local market, the US is not looking much outside its own fish bowl. This is why such initiative provides so much value: not only entrepreneurs and investors get exposed to new ideas, but meet peers who address markets with original angles. It broadens their views and stimulates their creativity.

During this trip, we joined various events such as Ignite Shanghai, Mobile Monday, Startup2Startup, the CHINICT and Global Mobile Internet Conference (GMIC) in Beijing, Startup Weekend in Seoul and Echelon 2010 in Singapore. Just those events are already worth the trip!

The group also had a few cultural experiences such as visiting the Shanghai Expo (tip: lines are short at the DPRK and Iranian pavilions), the Great Wall, doing Tai Chi with a Beijing master and various parties and cocktails almost every night. I met many remarkable people and probably swapped over 200 business cards in just 10 days – you can do better at SXSW or other large events if you have your routine, but what about quality? In addition, the links forged between the two dozen members of our group will also be a long-lasting asset to all of us.

Some remarkable companies

We heard pitches from over forty startups at our various stops. According to the tech writer who was among us to report on the trip, the most impressive were the Korean ones. They not only displayed a strong command of technology and design, but were developing original ideas and showed a high team spirit. Have you heard of Chatroulette, the randomized video chat service that is now a playground for exhibitionists? It happens so that a Korean company named Wetoku has been offering a similar service before the US one was launched, but not only got rid of nudity and added useful functions such as recording and embedding in any website of the video conversation. While they are still in search of a strong business model, the service is already working well.

Another interesting example from Korea was FlyFan, which improved the online group purchase concept of Groupon.com (followed in China by companies like Meituan.com). It invites “power bloggers” to broker deals to their audience, solving the high cost of deal sourcing and scalability that Groupon has. Such concept works in Korea thanks to the sophistication of its online population and is likely to develop overseas only in a few years. Another company named PixelBerry displayed an impressive browser-based 3D avatar customization technology.

A few other companies caught my attention, such as Singapore’s Foound, a mobile-based service allowing users to organize and broadcast their plans to their friends, which was a significant improvement over the US-based startup Plancast. The company got a standing ovation following their pitch at Echelon. Another was a Japanese startup named Sidefeed that developed a low-bandwidth streaming technology for iPhone. Both had ambitions beyond their national borders.

What about Chinese startups? Despite the high level of entrepreneurial activity in China, the focus is still mainly on bridging the gap with foreign markets. Investors also support this attitude by funding models they are familiar with. I mentioned before my model of describing innovation with “5C’s”: Copy, Competition, Combination, Constraints and Context. One example of this is a company named Lashou that created a mobile service combining concepts of location-based service FourSquare and group couponing Groupon (see article on TechCrunch).

I am glad to share the new ideas generated by this trip in attempting to describe differences among national innovation ecosystems: there are three “missing C’s”: Collaboration, Culture and Comedy.

The first one, Collaboration, is the sharing of information, resources and best practices among entrepreneurs, investors and other professionals, and the continuous re-investment in the ecosystem. When asked whether he was mentoring other entrepreneurs, Wang Xing, a 4-times serial entrepreneur and CEO of Meituan, a leading group purchase service in China modeled after Groupon in the US, answered negatively. When asked about how he was planning to beat his competitors, he said humorously that the strategy was “Run, Forrest, Run” (quote from the movie “Forrest Gump”). Speed of execution is of the essence, and entrepreneurs are often left to fend for themselves.

“Culture” refers to the ability to tune to other cultures, which is a must to globalize services and products.

Last is “Comedy”, which stands for the ability to establish an emotional connection with users and rise above the level of bland technology or commodity. Those three elements are yet to develop in many markets, including China.

Things are changing in China as well: the two conferences we attended we both aiming at displaying Chinese innovative companies and sharing ideas with other countries. If most companies are still focused on the domestic market, it is a matter of time before they venture out. Some in the online gaming and mobile space are already making inroads overseas. The very concept of the “Geeks on a Plane” tour is being emulated as well: the Mobile Internet Great Wall Club, a Beijing-based global organization of mobile industry CEOs, has organized study trips to over a dozen countries in the past year and plans to visit over 40 in the coming year. Again, innovation is not only about technology

As the examples above showed, innovation can be in business models, service concepts or even variations on existing concepts. The most challenging seems to remain identifying the value created by emerging usages of new services and designing appropriate business models.

Eventually, the innovation that surprised me the most is not a high-tech one. It is an innovation in an industry that rarely stands out: air travel. Asiana had a team of in-flight cartoonists that offered to draw caricatures of passengers (mine is attached). Other flights had teams of magicians and nail artists. That showed how a mundane flight can be turned into an unforgettable experience, which is what separates a commodity from an outstanding service. What unforgettable experience are you working on?

Apple’s iPhone case

Though a famous Western example, it is by no means the most recent, though it might become the most successful, until Google’s Android market possibly overtakes them. Apple’s ideas on guidelines, specs, revenue share practices and payment systems are almost identical to Docomo’s i-mode in 1999.

The fact that iPhone is succeeding 10 years after i-mode is a spectacular illustration of how mobile operators worldwide have failed at replicating the Japanese success and simply saw a gigantic market pass them by for a decade. Even Apple’s restriction on the ever-popular adult content is similar to Docomo’s. Paradoxially, Apple also sells songs, movies, books and provides a browser giving access to infinite amounts of erotica and profanity.

Facebook’s case

Despite the ambition of its founder to bring peace to the world, Facebook found its success mostly as a gaming platform, becoming the largest game publisher on earth in terms of users. Half of its 400 million users play games at least once a month.

A large part of Facebook’s advertising revenue come from content providers promoting their games to Facebook users. Facebook adjusted their notifications policy several times to keep up with what developers were coming up with to flood their users’ friends with messages. The fact that users are entangled in a web of relationships allows providers to leverage such “light endorsement” to their advantage. This ecosystem has been beneficial to Facebook and the providers who whether found loopholes or managed to keep up with the policy changes.

In this ecosystem, users are either “grass” or “worms”; service providers are mice and rabbits – with some snakes maybe – Facebook is of course the bird of prey. It is also likely Facebook will impose its “tax” by introducing its own virtual currency, taking a 30% cut from others’ revenue. Like a bear standing by a river where salmons are migrating upstream. One conclusion from the panel I moderated at the “Inside social apps” conference in April in San Francisco was that being dependent on a single platform was risky.

China’s and Japan’s social networks’ case

In China, several Facebook-like social networks publish their own games, thus competing with developers. Don’t expect risk-taking or originality there, those networks simply copy what works elsewhere to do their own. They also impose the use of their digital currency and take a solid cut on sales. With such conditions, it is unlikely any developer focused mainly on the Chinese market will grow anywhere close to those who operate on Facebook or internationalize.

In Japan, the situation is similar for two of the three social networks. GREE and Mobile Game Town were mobile gaming platforms before opening to third party developers and keep publishing – and giving way more visibility to – their own games.

Finding what social networks won’t do themselves, whether because it is a too small business, too complex or against their business model or public image, is a difficult exercise. Despite those conditions and its limited size, the Japanese market remains attractive for adventurous Chinese and foreign developers.

Twitter’s case

Twitter has been preaching the “open” mantra since early on: tweets are mostly public, they launched an API for developers and encouraged the community. It was as if Facebook, Twitter and Google were trying to “out-open” each other. Twitter’s high visibility, a consequence of the nature of its service, served it well to attract users, developers and investors. However and contrary to Facebook, its lack of any initial viable business model forced it to consider how to make money. The answer? Simply look at what successful third parties have come up with and do the same!

It was even possible for one of Twitter’s early investors to frame efficiently the discussion by calling third-parties “hole fillers”, while encouraging those who were not directly threatened to come up with “entirely new things”. Needless to say, those who managed to grow those initially popular services are left with a bitter taste in their mouth, as Twitter peacefully leverages the innovations and best practices they came up with.

The lesson: new platforms are not solid ground for a business, and nothing forces them to buy startups when they can replicate their services at a much cheaper cost, thus avoiding the uncertainty of finding “killer services” by themselves – who would disdain free R&D? To make an unlikely parallel: years ago when the mad cow disease was detected in the UK and the government ordered to massacre millions of cattle, Cambodia offered to ship them to help in finding land mines by walking them in open fields. The purpose was to avoid having people, especially children, walk on them. The proposal did not work out. In tech, a similar proposition seems to attract legions.

What can you do?

As users, it seems all pretty good: services are becoming legitimate parts of the platform, and when the platform itself does it, it is infinitely more trustable than when rogue third parties only following the “profit motive” do it.

That being said, managing an ecosystem successfully also means allowing third parties to thrive while protecting users – otherwise it’s simply exploitation. The purchase of Playfish, a leading game provider on Facebook, for 300 millions by Electronic Arts at the same time EA was cutting 1,500 jobs highlights how traditional game publishers have been unable to keep up internally with the changes in the video game industry.

For entrepreneurs, it is also a lesson on risk management: being dependent on a single company, while having no power to defend yourself puts you at a high risk.

As was said accurately over a year ago by Andreas Constantinou, Research Director at the telecom strategy advisory firm VisionMobile – who took the time to analyze the terms of services of the various emerging mobile platforms – “open is the new close”. Those cases are a reminder that despite the sweet talk about “openness”, the control of the ecosystem remains with the one who builds it.

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+8* | Plus Eight Star shows that concepts are universal, while implementation is local. Follow us at @plus8star.

Years ago, while working at a large telecommunication operator, I was invited to a large yearly event for the company’s decision makers and attended a session on “ecosystems”. An expert was explaining how industry relationships were changing from clients-suppliers to “ecosystem”. At the end of his talk, he was told by an attendee that the company already had many partnerships in place and that, frankly, there did not seem to be a big difference with this “ecosystem” thing he was talking about. From what I gathered, the presenter failed to get the idea across.

Almost 10 years later, we hear this word frequently in tech circles, and we can observe quite directly the impact on the industry of who “got it” versus who did not. More importantly, it has expanded beyond telecom and become tremendously important to the web. I’ll take a few important examples to illustrate how some key companies understood this very well and have used it to their advantage.

What is an ecosystem?

The first image that comes to my mind when mentioning the term is the one of a forest, with grass, worms in the earth, mice and rabbits on the ground, snakes, and birds of prey such as the wedged-tailed eagle.
Generally, grass is considered a free resource or “externality”, worms get most of the abuse and birds of prey have a good time, but everybody live together and can thrive together if things keep balanced.

Obviously being a bird of prey is a better position, but there are only a few of those, whereas worms, mice and rabbits can be many. I found that this image works pretty well for most industries, the point being to understand who is who in the chain, especially if you discover you are a rabbit, a mouse or worse, a worm.

The legendary case: Toyota

Toyota came up with a system for continuous improvement, later adopted by General Electric under the name “6 sigma”. Toyota is today applying is system way beyond product development and you would not believe the extent to which they go with the system of “five why’s” to identify issues. Despite its commitment and still being the largest car maker in the world, it is pretty obvious the company somewhat lost track of the purpose of this system.

The Toyota system relies on a network of relationships with suppliers, where those are trained at Toyota facilities, benefit from Toyota’s research and are allowed to make profits in exchange for better integration and not being simply left to compete and destroy their margins. Of course, the master of this ecosystem is Toyota and its partners are much more dependent on the company that it is on them.

The best telecom case: NTT DoCoMo’s i-mode

Docomo designed a platform on which each partner could focus on its strength: making good phones for makers, making good services for content providers. Docomo takes a significant financial risk by committing to buy large volumes of handsets in exchange for makers following its specifications. Content providers followed Docomo’s guidelines and benefitted from a very generous revenue share.

As a result, several of them listed on stock exchanges for millions and sometimes billions. Some went on to acquire other companies in Japan and overseas. Docomo changed little its model over the past 10 years, which means partners were standing on reasonably solid ground. Whether Apple did find inspiration in this model to create the iPhone platform and business model is left to speculation, but the similarities are striking.

Korea’s mobile industry case

Korea found inspiration in Docomo’s model for sure. However, their command-and-control attitude and lack of efforts in bringing down data prices created a market where most successful mobile content providers are… subsidiaries of operators! The top gaming companies have been stagnant for years. Maybe the introduction of iPhone and other platforms will change the balance of power?

China’s mobile industry case

Again, inspiration was found in Japan. Again, the model was taken to a different direction. Generous in appearance, China Mobile left content providers battle to grow the market, while taking increasing shares in sales. It also regularly cleaned up the market from abuse, after having taken its share, letting content providers take the blame. More, it launched its own services, sometimes competing directly with its “partners” and of course, wiping them out in the same move.

In effect, China Mobile used its ecosystem as free R&D, financed by foreign venture capital and the sweat of entrepreneurs. The fact that the ranking on the operator’s mobile service portal was critical and utterly opaque did not create stable businesses. Most companies who could find an alternative business such as Netease, Sina, Sohu and Tencent gave up on mobile as a reliable revenue source.

– Part 2 next week!
@benjaminjoffe

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+8* | Plus Eight Star finds amazing innovation prior art in Asia. Follow us at @plus8star.

This year seems to be the coming of age of three different technologies: augmented reality, stereoscopic & browser-based 3D and location-based services. Hollywood and Silicon Valley are abuzz with them. Truth it, the world has been “augmented” for a while and “reality” has become elusive. This column will attempt to give you a clearer view on how the world is turning into a sensory carousel, for what purpose, and how to train yourself to see things as they are.

Visual Augmentation

Vision is the sense on which human beings rely the most in daily life, hence the most important. The point here is not about glasses; it is about how images are re-worked to look better than they are. While not always advertised, it might be used to deceive or to serve viewers. This is done by companies but also individuals: anyone registered to an online matchmaking site is likely to use his or her best picture, which means that anyone met through such service will never look as good as their profile picture. A famous example of this is how it has been used by the company Unilever with their “Dove Campaign For Real Beauty” in 2006. They produced a video showing how a combination of lengthy make-up, hairdo, lighting and skillful Photoshop work to lengthen the neck, enlarge the eyes, could turn a “pretty, but ordinary girl” into a “strikingly beautiful billboard model”. The campaign was widely popular.

The opening ceremony of the Beijing Olympics was enhanced digitally to make it more enjoyable by the TV crowd – vastly superior to on-site attendees since an estimated 2.3 billion people were watching. Taking this idea to the extreme, some movie-goers experienced a state of depression after watching the movie “Avatar”. The reason was that compared to the beauty of the movie’s fantasy world, so called real-life seemed… gray and imperfect. As most urbanites do not get many chances to experience our very own Earth’s nature, the gap is indeed tangible.

Auditory Augmentation

We might be less familiar with how this sense work, and more tolerant to abuse. With audition the first industry that comes to mind is music. Are we being tricked there too?

It is arguable that it is for everyone’s auditory benefit, but it is also deceptive and sets unrealistic expectations about performers. The fact is that live performances, though thrilling, often sound worse than studio recordings. Are performers having bad days? The reality is much simpler: studio recordings make it possible to adjust their singing thanks to a piece of software. This software, named Auto-Tune, corrects the pitch in vocal and instrumental performances. Quoting Wikipedia: “It is used to disguise off-key inaccuracies and mistakes, and has allowed singers to perform perfectly tuned vocal tracks without the need of singing in tune.” It is reportedly used by major artists and performers who now simply expect imperfections to be corrected, offering a kind of auditory “plastic surgery”.

We have come a long way since Milli Vanilli’s singing duo – a best-selling pop act of the late 80’s – were found out to be only photogenic front men.

Olfactory Augmentation

In a world where odors are generally something to be suppressed, how could we be tricked? Discussing with a friend working in the perfume industry, I learned to my surprise that many supermarket bakeries were using a special fragrance to be more appetizing to visitors. Researching more on this topic I came across the company DMX, which is a “world leader in multisensory branding”.

One case study is on the “French Bread Scent”, which “may provoke your customer to plan a whole week’s worth of menus surrounding this one basic food staple.” Business benefits are obvious, and apply also to related businesses: “an appliance retailer in the Southeast realized the value of gourmet scents when they found that the faint smell of home cooking in their store boosted sales by 33 percent.”

As reported by DMX, “while vision is unquestionably our most powerful sense, when it comes to garnering an emotional response, scent is a much more powerful trigger.” So if your bread does not taste as good as it smelled, try to remember the fragrance in the store!

Gustatory Augmentation

This one is rather easy: flavour enhancers such as the famous monosodium glutamate (MSG), widespread in Asia, is now reportedly used in processed food and many fast food chains.

So tasteless food can be promoted to tasty food, regardless of their nutritive value. We’re not far off the dystopian future of the movie Soylent Green, where overpopulation leads to a lack of resources and most are fed processed wafers of dubious origins.

Tactile Augmentation

With all the touch technologies coming about, this might be the next frontier to create a tactile reality closer to our liking. Several aspects of tactile enhancement are already used in product packaging: roughness, softness, slipperiness, warmth, coarse and fine surface finishes, compliance, sliding friction and thermal contact properties are all part of the touch palette and affect how pleasurable, exciting or indulgent a product feels.

And just like designs can be patented, a recent case involves a company registering a “velvet textured covering on the surface of a bottle of wine”. Can you fake touch? Though I did not find useful examples, it is certainly possible to affect the sense of touch with vision, sound and temperature.

Sixth Sense, and more

The common classification of human senses, attributed to Aristotle, counts only five of them. However, as surprising as it might sound, neurologists do not agree on the number of senses due to the variety of definitions and several more could be counted as “senses”: balance, acceleration, temperature, motion, pain, time and possibly more.

There are already ways to simulate some of those – one example is the “Haptic Pen”, developed by a tinkering researcher at Carnegie Mellon University. It is “A device for providing tactile feedback in a stylus that is able to simulate the sensations of pressing a physical button.” In other words: it “feels” like pressing a button, while nothing is actually moving. Such inventions are expected to enter the realm of consumer products soon, as the spread of touch screens will look for more sophistication.

What can we do about it?

If you have followed me thus far, you might start to distrust your senses and question the intentions of makers of numerous products. But if an augmented reality is more pleasurable, why not simply let it be? The key issue is that pleasure is not necessarily beneficial: just like food can be very tasty but not nutritious, the problem is the increasing disconnect between our instinctive sensory reaction and the long-term effects of sensory abuse.

Are we unconsciously creating a reality in which nothing can be “naturally” as perfect as they look? All sorts of media have been promoting characters that fit narratives, which in turn affect our behavior. If we try to live by such high expectations, are we condemned to pursue illusory goals and being eternally dissatisfied, as our reality is unlikely to match a more perfect fiction?

I wish I could provide an answer to this, or a path of action, but it would imply whether future-gazing abilities or a much deeper understanding of human nature than I have. We might live to see a comeback to “natural reality” or witness a development toward more reality augmentation. Which do you prefer?

@benjaminjoffe
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+8* | Plus Eight Star finds how digital and analog life already blends in Asia. Follow us at @plus8star.

The panel I moderated was focused on internationalization, with an emphasis on Asia, including how Asian companies see the challenges of going global.

The presentation guide is below, report follows courtesy of Inside Facebook.

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We had a strong international showing today at our Inside Social Apps 2010 conference, and this included leading developers coming out of China. As Facebook has grown around the world, social games on its platform have also spread. The example of their success has in turn inspired other social networks to open up their platforms to developers, notably happening on Mixi in Japan and RenRen in China.

We examined how developers are building businesses around the world in the “Thinking Globally: How to Monetize International Audiences” panel.

Here’s who was on it:

• Rex Ng, CEO, 6 waves (Taiwan)
• Season Xu, Co-founder and COO, Five Minutes (China)
• Patrick Liu, CEO, Rekoo (China)
• Ron Hirson, Co-founder and SVP Product, Boku (US)
• Benjamin Joffe, CEO, +8* / Founding Partner, Cmune (Moderator)

And here are our highlights. Note: You can check out tweets from this and other conference sessions via the #isa2010 hashtag on Twitter. Some comments from Twitter:

@susanhailey Org of friends/social groups is different in China, Russia and Japan. Hard for FB to penetrate markets in non-colonized countries.
@hotlou: Season Xu touching on some thoughts similar to @garyvee: 1. audience is the asset. 2. measure the audience of the future.
@susanhailey Future trends for global social gaming: diversify platform and make games appealing to all cultures which is challenging.
@justinkistner: Cultural differences in social gaming: Asians like to buy goods for status & Westerners like to buy things for fun experiences.
@john_fan #isa2010 Season talks about “cold jokes” 冷笑話
@hotlou Most entertaining panel so far. Learning about cultural disparities that contribute to success/failure is getting lots of laughs. #isa2010
@Baris Listening int game developers panel @ #isa2010 @benjaminjoffe did good job in setting up the context.Great way to moderate a panel!

+8*: Can you start out by telling us more about your companies and were you focus.

Ng: We’re active around the world on Facebook, in every region.

Xu: Around one-eighth of our users are on Facebook, but that’s where we get 50% of our revenue; also, 80% of our Facebook users are Taiwanese.

Liu: We’re the top social game developer Japan, South Korea and China. We’ve launched on Facebook but we’re still not very big, with around 1.6 million monthly active users.

Hirson: Boku is live in 60 countries, with revenue coming from around the world.

+8*: You’re all working in multiple countries. How did you pick the markets you expanded to?

Hirson: We went for merchants looking for traction on social networks. We looked at top 5 social networks, countries, mobile phone penetration and data usage, and compared that to credit card penetatration. Many countries don’t have good penetration. In some countries, we see mobile payments as the primary method that people pay. The US ends up being about one third of our payment revenue, then a third in Europe and a third from the rest of the world. That’s because of the spending power of Europe and America. But in Asia the amount per person is low but the volume is high because there are so many people.

+8*: Patrick, you said you were the number one social gaming company in Korea and Japan.

Liu: We launched in China and decided to try Japan and South Korea, and now Russia, too. Second half of 2009 we came to Facebook. We made lots of changes for Western users. Japan is a pretty good market, but the barriers are extremely high. South Korea, too.

+8*: How did you decide to address those options?

Liu: In the beginning we didn’t know, we just wanted to try. My first venture was a social network company in China in 2004 and 2005. I got to know Mixi in Japan. I saw the evolution of Facebook. I got to know Cyworld in South Korea, I thought, well, we have a product right here. Let’s try. In Japan we had to do a lot of changeover.

+8*: If I remember you had a little help from local partners and investors.

Liu: In fact that’s not correct. In the very beginning, nobody helped us. But I happened to know some people, I asked the Mixi platform — can you get the foreign company in? Of course they said, but we went through lots of efforts. From the first day we launched our product in Q4 of last year. But after the first week, we had all viral growth, we grew so fast, that the platform said great job.

+8*: Cultural differences — it can be difficult to localize a game to certain markets. You launched a farm game first. What’s different about China versus the US.

Xu: We added stealing, but that’s not popular in western audiences. It might sound bad, but it represents a different meaning. In China, a shy guy might like a girl so he steals her book, then inserts a secret note, then he gives her the book and she finds the note.

Certain aspects can work in China but not elsewhere. One of our animals has no anus. It holds money but nothing gets out. If you have it, then you can have 1% more harvest in our farming game. But obviously when we put it in Facebook, people didn’t buy it. Also in China, we have jokes called “cold” jokes” that, when you say out loud it’s so stupid that nobody says anything. You don’t say anything, you just stare at him. Those are popular. These cultural differences make it harder to port our games to different markets.

+8*: Rex, you’re a publisher and you don’t develop your own games any more. How you decide which developers to work with?

Ng: We see the stuff from the US getting better at having universal appeal. It’s still the mass entertainment capital. Like movies — now social games. But we have to see if a game will work for a particular region. We used to have a game called “world at war,” where you represent your countries. But we found there are different behaviors. Chinese like to save money, Americans like to buy weapons, Italians just like to fight, period.

Xu: Asian people want to exchange money for status. But Western players want to exchange it for fun and entertainment.

Liu: More than language translation. We found that there are many many times that Japanese people don’t like at all. It seems Russians have a different feeling about vegetables [+8* | e.g. in Japan watermelon is an expensive fruit so the ranking of the fruits has to be adapted to the local culture].

+8*: Patrick, what’d you do to localize?

Liu: We have our own office in Tokyo, and one in Russia. We also hired people in the states who have worked in China. They can communicate with us. We are dealing with different cultures and regions. The combination of different kinds of people.

+8*: How are you handling global growth?

Hirson: Competition to get your app up and live and good penetration — better opportunities outside of the US. We see great ARPU in Nordic countries. If you’re developing on top of Facebook, you identify where advertising is cheaper and revenue is higher.

+8*: What’s your view on future trends and opportunities of monetization.

Ng: I’m seeing a diversity of developers. Before it was only three types of games: resource management, RPG and pet-caring. A lot of those, and a lot of fast followers. Now I’m seeing a lot of diversity. Feature, higher ARPU. First-person shooters, all sorts. I think there’ll be different kinds of content.

Liu: You have to diversify the platform. You cannot be dependent on one platform. The second thing: Internationalization. Now that you have one product, you can distribute it to everywhere. Marginal cost is almost zero.

+8*: Do you see revenue per user paralleling GDP per capita in countries?

Xu: It matches countries

Liu: It’s growing fast

Ng: After we get game cards, pretty comparable in China — a bit better than GDP per capita. We go in at pretty low price point. Gamers can choose… with the right optimization, it’s pretty comparable.