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Mobile games used to be hailed as a perfect way to pass the time while standing in line. But along with a rise in competitive gaming, there's been a rise in competitive mobile gaming. And smartphone makers are trying to cash in.
China leads the world in its adoption and investment in mobile gaming, and domestic smartphone brands are now exploring a niche product direction: specialized gaming phones built for fans to play competitive esports games.
In China, mobile games rose from the ashes of consoles, which were banned by the government for over a decade until 2015. The proliferation of low-cost smartphones filled the void, which had an impact on a generation of gamers: today, over 90% of China's 685 million gamers play on their phones, and mobile game revenues account for 75% of the gaming industry's total. With its sheer size, it's clear that everyone, including hardware companies, wants a bite of the market.
Just as gaming laptops have tried to differentiate themselves from work laptops by offering high-performance GPUs and other gaming-specific specs, gaming phones boast high-standard specifications, futuristic designs and extra components like cooling systems to improve the gaming experience. In fact, laptop makers Lenovo and Asus are among the brands that are entering the gaming smartphone arena: Lenovo has its flagship gaming phone, the Legion Phone Duel 2, which was released in April, and Asus has the ROG Phone series.
There are also the top domestic smartphone brands like Xiaomi, Vivo and Huawei that view gaming smartphones as a unique way to appeal to their younger customer base. On April 27, Lu Weibing, general manager of Xiaomi's lower-end product line Redmi, announced that the company will "make manufacturing specialized gaming smartphones a long-term strategy." Xiaomi is currently the third-largest smartphone maker globally by the number of shipments.
The emergence of gaming smartphones is also driven by how esports have increasingly shifted to take place on smartphones. "[China's] established esports culture induces demand for high-performance devices, while a lot of other markets are still lagging behind in terms of esports development," Yexi Liao, a Taiwan-based market analyst at IDC, told Protocol. After all, no one buys a special gaming phone just to play something casual like Candy Crush; the target audience for these phones are gamers who play competitively and need professional gear to boost their performances.
In recent years, China has developed a popular mobile esports scene, attracting millions of viewers and even becoming economic priorities in top-tier cities. That means high-profile tournaments, mobile esports clubs, massive sponsorship deals and a lucrative ecosystem that gaming smartphone makers want to be a part of. And the smartphone makers are relying on game developers to help boost their cache and drive growth.
This is a highly-concentrated market. The most popular mobile games, like multiplayer battle game Honor of Kings or shooting game PUBG Mobile, are mostly controlled by a few behemoth Chinese companies. Whether a gaming smartphone brand can get a sponsorship deal in, say Honor of Kings's annual tournament, can make or break the brand's future.
But the relationship is a two-way street. Just as Netflix and Prime Video fight for dedicated buttons on TV remotes, controlling the access to games can open up a unique business opportunity for phone makers.
"Most of the gaming smartphones we've seen have customized versions for one or several gaming companies," Zhang Yi, CEO and chief analyst of Chinese research firm iiMedia, told Protocol. "For consumers, it means they can launch a specific game by simply pressing a button."
There are still many problems to solve for the gaming smartphone makers, like how to reconcile the high cost of specialized hardware features and the low purchasing power of the customers they are targeting. Or quality issues. In April, a smartphone review revealed that the Legion Phone Duel 2's flimsy design was the result of cooling elements within the phone — elements specific to gaming.
"Currently the business model [of gaming smartphones] is still at an early stage in China. Once it gets market validation … if it can survive 2021 and 2022, I believe this market will have explosive growth," Zhang said.