When talking about the overseas exportation of Chinese video games, one market you might never actually think about is the Middle East. According to the 2018 report of Chinese mobile gaming’s going overseas, in terms of total money spent on games by Chinese developers, the top ten countries are all from North America, Europe and other parts of Asia. Saudi Arabia ranks the first out of countries from the Middle East. Considering the cultural differences, one of the major problems in terms of localization is the language. For Persian speaking regions like Iran, it could be a little confusing for users to understand the cultural settings in dynasty games like The Three Kingdoms. However a wide range of genres from role playing games, to casual games are still to be explored.
This year at China Joy, Cafe Bazaar from Iran, the largest third-party platform in the Middle East, came to China expecting to expand their previous partnerships and build new ones. Founded in April 2011, the platform now boasts over 40 million users. A Japanese survey by Waseda University analyzed all the third-party app stores, in terms of the number of malware and Appware. Cafe Bazaar has an index close to that of Google Play. According to the survey, “As we described in Section 2, Cafe Bazaar is the most prominent market in Iran and has its own billing system. Because the access to Google Play is restricted in Iran, many users rely on Cafe Bazaar. Therefore, it is good that Cafe Bazaar exhibits a good security index.”
Pandaily also had a chance to talk with Ali Ahmadi, the Global Engagement Officer of Cafe Bazaar. He spent around 20 years in New York City and was back in Iran last year. He was also a researcher of Middle Eastern geopolitics and US foreign policy towards Iran.
About Cafe Bazaar
Cafe Bazaar is the largest gaming platform in the Middle East, right? In all of the Middle East.
Right, I mean there’s nothing really like us anywhere else in the Middle East. There are a few small app stores here and there. But for Persian speaking people in the Middle East in general, we have 40 million users. So yes, we’re the largest third-party platform in the Middle East.
It is reported that Cafe Bazaar is started by college students. How’s the entrepreneurship environment in Iran?
Well, the tech market in Iran has been growing dramatically over the course of the last five, six years especially. Even with whatever economic problems there are, this particular sector of economy has been growing very quickly. Everybody in Iran has a smartphone these days. Everybody uses e-commerce on a regular basis. That provided a lot of different opportunities. People are looking for technological solutions in their daily lives. Since we were founded in 2011, if you think about six years ago, we had about 6 million users and we were working with 3000 developers around the country. Now we have 40 million users and we’re working with about 22,000 developers. The growth has been very significant.
In terms of game revenue, we were third behind Turkey and Saudi Arabia. But the thing is we have a lot more room to grow. The Turks have already reached a certain saturation points. The Saudis, there’s a lot of oil money there, but not a lot of people. That’s sort of the problem with the Middle East a lot is that you have a number of very large companies, and large countries in the Arab world that have a lot of people but not a lot of money. And you have these tiny little countries that have a lot of oil money, but like very few actual people. We just surpassed 40 million users a few months ago, in terms of number of users we’re certainly up there and have the most potential.
I’m thinking is the great success of Cafe Bazaar relevant to the American sanction on Iran? How would you comment on that part?
Yeah, I mean, certainly, you know, we are a completely private company, so the sanctions don’t really directly apply to us. But, they do sometimes make things a little bit harder. We work with developers around the world. For example, when we need to send, like revenue back to a certain developer abroad, certain things like, HSBC or something, some banks that are very heavily intertwined with the US financial system, they might sort of shy away from facilitating the transaction, but other banks, other financial institutions will, because it doesn’t really violate sanctions for somebody to post their game on our platform and for us to sort of send the revenue from the game back to them in China or wherever it be. So that doesn’t really violate the sanction so much as some like large financial institutions might shy away from it. We can find a way to get things done without violating sanctions.
The sanctions apply to some things and not everything, there was this sort of embedded impression. It’s like the US sanctions ban all business with any Iranian. And that’s really not the case. I mean, we do business with Supercell, which is the biggest game developer in the world. They’re the ones who build Clash of Clans, that’s available on our market. We do business with a lot of Chinese developers like tap4fun and major institutions like Elex. We can do business with them and we can send the revenue from their games back to them. And it’s not really a problem.
How Is Google Play in Iran?
Google Play is available. It doesn’t provide services. So if you want to post the game for Iranians to use, Iranians can download the game, but they can’t pay money for the game. So for monetization, if you want to monetize the game, you’re going to need to work with us. But Google Play is available here nonetheless. You know, our market is sort of suited for a Persian culture, for our language, for our markets and culture. So our users still prefer us.
They don’t have a billing, they don’t have any sort of support that we offer. So they don’t do that stuff in Iran, I’m not sure if it’s political or just because they don’t want to do it. I have no idea. But we do those things that were made for the market. So people still appreciate us. And that Japanese study I mentioned, they created a security index. and we are tied with Google Play in terms of the security of our platform. Only Aptoid is slightly ahead of us. I think a lot of people assume the third-party platforms are not as safe as the bigger guys, Google Play and all that, but this very clearly states otherwise.
In talks with Chinese developers
China and Iran have this free visit policy now and the geopolitical relationship between the two nations are strong. Is that relevant to the general background of what’s happening between China and the US? Iran resorts to China more?
I don’t know exactly how relevant it is. I think it creates some opportunities. The politics between China and the United States obviously are complicated. But we’re really focusing right now on Chinese developers. You guys have a lot of very good developers. They make a lot of very big games and that’s become a real focus for us, over the last few months, about half a year. That’s why we were at China Joy. And so, you know, what we’ve noticed, especially recently over the last month or two, is a significant increase in interest from developers towards our region. And you know, part of that is certainly because our market has become a lot more lucrative. Our domestic games for example, their revenue has gone up 59% just in the last year. So our market has become a much better place to do business. But you know, presumably the trade war is making revenue from Europe and North America a little bit more suspect, a little less reliable, so that might also play a role.
Have any deals been struck at China Joy?
China Joy was a great opportunity for us to sit down with some developers that we’ve been talking to. There’s still a bit of a process to get them because we’re a market that is very tailored for Persian speaking people in the Middle East. Our apps, our games are made for our markets. And so a lot of the games that are being brought to our market need to go through a process of localization when they’re translated and all of that, so that process is going on for a number of games. I can’t really announce anything right now. Another thing was that, we got to meet a lot more developers. So we started dialogues with them. Overall it was very successful.
We’ve been talking to all the larger firms. Elex is a very large firm itself, but as for Netease and Tencent, we’ve been talking to everybody. The process of getting into our markets is very simple. For instance, if you’re trying to sell games in Cairo, Egypt, you have to learn how to market games. You have to hire people there, you have to build a business infrastructure, post it on Google Play and hope that people find it there. With us, you don’t really have to do that because we understand our markets. We have partners here, they can localize it, we can promote it on our app store. So we can put them in the best possible situation to be successful without actually having to invest money in Iran and build infrastructure here.
We also don’t really have a government licensing. For a lot of Chinese developers, the licensing process is long and arduous. We don’t really have that. If that ferments as a problem with something or another, every once in a while, we can deal with that ourselves without them having to come to Iran and deal with it. So there’s a lot of opportunities here, as getting games onto our platform is very easy.
You mentioned earlier that language is the biggest problem in terms of localization. Apart from language problems, what about cultural or even religious localization? Would that be a problem regarding some Chinese mobile games? Cause I think, in some of the games, for example like League of Legends, they have like suggestive female characters. I presume that might be a little bit of problem in the Middle East. That’s what I presume. But I would like to hear what you think.
I think I’m actually not entirely sure. I think we might have League of Legends around. You know, language is really the main issue, in terms of storylines and some of these things to customize to our culture. We might sometimes during the localization process might tinker with some of the characters and storylines with the permission of the developer obviously. But you know, the first thing we do with developers is we consult them as to like what game they have and whether it is appropriate for our market. What we do well here is that usually doesn’t have anything to do with religion. It’s just more about, you know, some times you have many games in China that are very tailored to the Chinese market. They’re about, dynasties, the Han dynasty or something like that. That might not necessarily relate to our users as much. But sometimes they do. And a lot of foreign games had a lot of success here. But I would say it’s just a matter of what we think our users would enjoy. Because of Clash of Clans, strategy games and role playing games have become very successful here. But language is the biggest issue.
Is there a reason behind the appreciation for strategy games and sports games in Iran?
Clash of Clans has been very successful here. And Clash of Kings, which is an Elex game, Clash of Zombies. That’s been very successful. So, yeah, a lot of these games get a lot of downloads, a lot of these games also, you know, are good for very well-suited for hardcore gamers. So, you know, they will make a lot of money even if they’re not necessarily getting millions and millions of downloads.
And so a lot of people look for something like that to get into. But you know, there are many other categories like casual games and role playing games have been growing as well. And you know, all you need is for one really big game here. You know, a solid game to come in and would reinvigorate some other categories of games as well. A lot of Chinese games that have come here have also been strategy and role playing games and they have been very successful, but we don’t just look to those categories and there is a broad interest in a variety of different categories.