On 2nd September, Indian authorities banned the popular battle royale game PUBG alongside many other apps with links to China. However, just a couple months later, PUBG is planning to stage a comeback. So in today’s Finshots, we will look at how the saga has unfolded so far and why the gaming company is so desperate to make a re-entry.
First thing’s first. PUBG is not exactly ‘Chinese built’. Instead, the game was developed by PUBG Corporation, a subsidiary of the South Korean company Bluehole Studios. Then, in October 2020, PUBG Corp. merged with another company founded by Bluehole Studios called Krafton Inc. And today, the game operates under this banner. As for the ‘Chinese connection’, Tencent is Krafton’s second-largest shareholder. The Chinese conglomerate holds a 13.2% stake in the firm and they are also authorized to publish the mobile game in India.
Which brings us to the next question?
What does a game publisher do exactly?
In theory, they could do many things. But Tencent was largely responsible for publicizing and marketing the game in India. And because of the massive role they played in promoting the game, you could argue that the company had access to sensitive user data. So when rising border tensions between India and China prompted the government to scrutinize several Chinese-made apps, PUBG was caught in the crosshair.
Actually, that’s not true. At first, the government banned 59 Chinese apps and PUBG did not make this list. And Indian gamers were thrilled. However, soon enough, the government released another list including 118 Chinese-owned apps and this time PUBG wasn’t so lucky.
And while it might seem like the ruling would have dealt a death blow to PUBG, the actual impact was rather limited. PUBG made lifetime revenues totalling $3.5 billion. And India only contributed a mere $41.2 million. That would mean a net contribution of 1.2% to the game’s global revenue. And while PUBG Mobile was the top-grossing app in India between 1 January and 31 August this year, our market isn’t exactly going to make or break the company.
But then India is still a massive market. Granted, the monetization potential might be limited for now, but it tells you precious little about the future of PUBG in India. More importantly, PUBG is a battle royale game, where multiple players compete against each other online to claim victory. Its global allure stems from the fact that you always have millions of players playing the game at any given point in time. And India is a big contributor here. With over 175 million downloads and around 50 million monthly active users, India contributes about 10% of the global user base.
As one article notes —
Such is the popularity and user base of PUBG that a recent PUBG Mobile Campus Championship saw 250,000 registrants from across 1000 Indian colleges competing for the hefty prize of Rs. 50 Lakhs (~$US70,000). The rising popularity of PUBG has also created a new co-branding opportunity for brands. OPPO, a leading phone maker, is opening a PUBG themed store in Bangalore. Even Bollywood jumped on the PUBG bandwagon with Vicky Kaushal, a leading Bollywood actor, playing PUBG Mobile with Soul Mortal, a leading PUBG mobile player in India, in order to promote his movie Uri.
So it's no surprise that Krafton has been trying to undo the ban ever since.
In fact, as soon as the ban was announced, PUBG got to work and the gaming company revoked Tencent’s publishing rights in India. After severing ties with Tencent, PUBG started exploring options in a bid to find an Indian distributor for the game. In fact, recently the company announced a deal with Microsoft Azure to host its games on Microsoft servers in the hopes of assuring government officials that security and privacy are a top concern. And if recent reports are to be believed, the company has also informed some high-profile PUBG gamers in India about the possibility of resuming services before the end of 2020.
So what do you think?
Will PUBG make a comeback or is it doomed to fail?
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Also don't forget to check our daily brief. In today's issue we talk about China's push to control its tech companies, Harley Davidson's latest legal challenges in India, and the effects of food inflation in India. Do read the full draft here.