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PE Interview With 51wan.com
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 Beijing-based 51wan.com, founded by a pair of former Kingsoft employees in mid-2007, operates browser-based massively multiplayer online games. The company received an investment, rumored to be in the range of $10 million, from Sequoia Capital earlier this year. 51wan's biggest win so has been getting its games included among the first group offered on Baidu's new online game channel, which launched in April. 51wan also has partnerships with 51.com (the two companies share Sequoia Capital as an investor) and Sina.
51wan currently operates several licensed games: XBA (a basketball management game), Mi Ni Guo, Rise of Empire: Might And Hero, Luan Wu Chun Qiu and Fang Bian Mian San Guo. 51wan plans to operate a total of 10 games by the end of 2008, including four in-house developed games.
We recently spoke with 51wan's founders, CEO Sunny Liu and vice-president Ruth Li, about 51wan's business, partnerships and plans for the future.
PE: Could you give us a brief introduction to yourselves?
We have been working in game industry for quite a while. I [Sunny] have been working on massively multiplayer online games and Lucy was part of the group that founded Object Software, where she worked on the company's overseas business. We met while working at Kingsoft, where I worked on marketing and Lucy focused on the company's overseas business.
PE: What are you guys are doing at 51wan?
We do browser-based web games; games that do not require a client-end download. We are using games to promote Internet services, and the Internet to promote our online games. Though online games are considered an Internet service, it is almost like two different industries. The good thing about games is that they have a clear revenue model. The advantage of the Internet is that it is a great promotional channel and lends itself to building a community. We hope to use our games to attract users to our website, and the games allow us to turn that traffic into stable revenue. Once our games become popular, our site will become a community.
PE: How is 51wan different from simple browser-based game sites?
We do not do Flash games. Flash games do not allow as much interaction or as many concurrent players. There is a not a persistent game universe. Our games are MMO's—you can have tens of thousands of people playing at once. Also, the revenue model for Flash game sites, like 4399.com, is usually advertising, but we depend on in-game spending by our users. We are also different from traditional MMOs in the market today. Most MMOs now are role-playing games (RPG), but we will have all types of games—RPG, simulation, RTS, casual, and even pet-raising games.
PE: Can you give us some usage statistics for the site?
We have 2.2 million registered users and about 500,000 active users. The PCU for our games has hit 90,000 to 100,000 across all games. Our company has five to six games and we also provide access to other games including overseas games on our website.
PE: Are you doing in-house game development in addition to licensing?
We plan to launch four in-house developed games this year. Other games will be licensed. We are developing a few animation-style games, which are more targeted to female gamers, as well as some martial arts-style games.
PE: How many employees you have?
We have 50 employees overall; 20 are doing R&D.
PE: Can you give us some details about your partnership with Baidu?
We do all the game operation—we run the servers and provide client support—while Baidu provides us with a platform where we can promote our games to more users. We have signed a strategic cooperation with Baidu that allows us to put all our games on Baidu's game platform.
PE: Is 51wan using a strictly item-based revenue model?
We primarily generate revenue from the sale of virtual items in our games. We don't charge flat subscription fees to play the games, but players can sign up for VIP services, such as paying a monthly fee for increased experience points or access to certain special virtual items, for a monthly fee.
We have also run a few banner ads on our website. We have done ads for Kingsoft’s anti-virus software Duba and China Yahoo. We have not started doing in-game advertising; our focus this year is on the customer experience. In a few years, we may work on releasing in-game advertising based on a standard, because there is no industry standard yet.
PE: How do you promote your site?
We work with partners to promote it, and we also do new releases. We have a pretty regular schedule of releasing two pieces of news a day and holding one press conference a month.
PE: Have you sought any other partnership such as Baidu?
We have also partnered with Sina to launch games on their platform. We have so far launched one game, Rise Of Empire, on Sina's platform.
We also have partnered with 51.com. We have opened a channel where 51.com users can use their 51.com account to play our games.
PE: Is there a revenue share with your partners?
Yes, the split is difference for each agreement, so we can't disclose the percentage breakdown.
PE: Who are your target users?
Our main users are home users, students and office workers.
PE: With the online games industry so competitive, why did you choose to join the fray?
We entered this segment of the industry pretty early actually. We were probably the first in China to do the type of browser-based games we are doing. The first games that Baidu and Sina launched on their platforms were 51wan games.
PE: Do you feel you are competing with QQ Games?
With QQ Games, you still need to download and install client-end software. Some companies may not let employees download software from the Internet. We are exclusively focused on web page-based games, while most large platforms may see these types of games as just another part of their business; it is not their focus.
PE: Have you considered licensing overseas games?
We have licensed several games from overseas, but we are waiting for a clear policy from the government about operating overseas online games before we launch them.
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