Valve said it will work with local partner Perfect World, which it previously collaborated on to release major games Dota 2 and Counter-Strike: Global Offensive. Shanghai-based Perfect World will control local promotional, the selection of games and distribution. There’s no confirmed date for when the Steam China service will go live.
The move makes perfect sense. For one thing, Valve has a vast opportunity to tap into. China’s games market is booming, with Newzoo forecasting that it represented $32.5 billion in 2017, ahead of the U.S., Japan, Germany and the UK. PC gaming has always been the base for revenue, but mobile is growing fast with Tencent — one of the largest gaming firms on the planet — recently reporting that its mobile revenue has overtaken that of PC.
But, as with all things China, access is uncertain. Parts of Valve’s service were blocked in China last December, although the ability to guy games remained intact. It isn’t clear why the partial blockage occurred — China frequently upgrades its firewall technology which can trigger changes — but working with a local partner is a more reliable approach than going solo. That said, Perfect World will have to manage the inevitable government censorship demands.
Despite having no official presence in China, more than one-quarter of Steam users have the language set to Basic Chinese, second only to English, according to a user survey. Whilst that also accounts for the Chinese diaspora, it is a sign that Steam already has significant traction among China’s gamers.
There’s plenty of competition in this space, so Valve won’t simply waltz into dominance. Tencent has its own Steam-like platform while NetEase has partnered with big U.S. gaming companies like Bungie and Blizzard.