Denver, CO

47.81°F

12:00pm
/ Cambridge, MA

50.08°F

12:00pm

Konvoy Ventures is a thesis driven venture capital firm focused on the video gaming industry. We invest in infrastructure technology, tools, and platforms.

Game Localization

Localization of game content, Microsoft console bundling, esports broadcasting rights

Game Localization: Effectively Adapting to Different Regions

Game localization is the process of preparing a video game for new geographic markets. This typically involves figuring out distribution, language translation, and adaptation for local customs and laws. Studios often tackle localization work internally by using various translation software as well as a plethora of outsourcing options. Heather Chandler, a studio director and former producer on Fortnite, has an interesting breakdown of the levels of localization in her book, The Game Localization Handbook:

Studios have to decide what level of localization is required for their video game as well as what markets to target. A lot of countries and regions have high proficiencies in English even though it’s not the native tongue (Sweden, Germany) while others do not but are still very large markets for gaming (China, Japan). On top of that, translation for some languages, such as Japanese, can be much more expensive than others. There are multiple tradeoffs for studios to consider here. This is roughly the state of game localization as it exists today, as language translation efforts are the way most developers and publishers reach new markets.

One area of localization we’ve been thinking about is adaptation. Kai-Fu Lee (head of Sinovation Ventures) has a great book on the growth of AI in China (AI Superpowers). In parts of the book, he details the lack of success that Western companies had in deploying translated versions of their homogeneous software in China and how Chinese entrepreneurs in the late 2000s and 2010s built successful new software applications that were localized and adapted specifically for the Chinese market.

Similarly, if this were carried over to video gaming in regards to expanding to new markets, maybe the focus should be less on localizing existing games (language translation, the status quo) but rather creating entirely new games that are more tailored to those markets. This would include not only language translation but also culture references, design customization, monetization differentiation, unique community management, and much more.

China and many other Asian markets are already well serviced locally, but as the gaming market continues its expansion to the global south and other developing regions (Africa, South America, Southeast Asia, etc), we believe new markets could be opened up more successfully if games were better tailored to local contexts and cultures.

Microsoft (Xbox): Bundling their Console Offering to Increase LTV

Today, consumers pay separately for Xbox Live (ability to play online) and games (individually and/or bundled via Game Pass). In their next generation console, Microsoft will likely be bundling these two together. This will set a new standard for online access + game distribution via console. This model inches closer to a Netflix-style content distribution with consumers buying less one-off games and instead paying a subscription for a more complete library of content.

This will also be the first time Microsoft makes first-party releases (games fully owned and built internally by Xbox) available on Game Pass day one, as they have traditionally added older games to Game Pass (monthly subscription). For context, console gaming accounts for ~24% ($36B) of the gaming market. We expect consumer LTV to increase due to this more comprehensive subscription-based bundling as we expect the consumer will pay more for this higher value proposition.

This is also a clever way for Microsoft to monetize on the revenue they lose from free-to-play (FTP) games, which they support on their platform but only monetize through in-game-purchases. By bundling online access with a library of top-tier games, consumers will be far more likely to purchase Xbox Game Pass while continuing to spend in-game (win/win for Microsoft).

HUYA Acquires Broadcast Rights to CS:GO and Dota 2 Events

Tournament organizers ESL and DreamHack have entered an exclusive broadcast deal with Chinese live streaming platform HUYA. The one-year deal will see the CS:GO Pro Tour and prominent Dota 2 tournaments broadcast exclusively on HUYA for 2020 in standard Mandarin along with other Chinese languages and dialects.

The new agreement covers all upcoming tournaments from the ESL Pro Tour, including the ESL Pro League circuit, ESL One tournaments, and Intel Extreme Masters events. Alongside securing the rights to all ESL Pro Tour components, HUYA has also secured the rights to broadcast DreamHack CS:GO and Dota 2 tournaments through a sub-licensing agreement.