Big opportunities for small service providers

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VietnamNet English - 40 month(s) ago 5 readings

VietNamNet Bridge – Cooperating to develop services on social networks will bring social networks’ owners and content providers (CP), especially the small and medium enterprises which do not have big financial capability, the opportunities to access the large community of netizens and earn big money.

After many years of operating as a team that writes online games and failing to gain the desired achievements, Nguyen Duc Tam, Managing Director of Hoang Phat, decided to establish a company in early 2011 in an effort to more easily access online service providers and social networks.

Cooperating will bring opportunities

According to Tam, it is very difficult for a small company to develop and popularize its products. Therefore, it would be better to take full advantage of the resources that online service providers have already.

In the field of online game development, there are many choices for the enterprises which want to join the market: they can either develop MMORPG (Massively Multiplayer Online Role-Playing Game) on already existing social networks, or create social networks themselves where they will post games.

In Vietnam, the number of MMORPG developed by Vietnamese engineers remains modest because of the limited capability. To date, most of prevalent games are the imports from China, South Korea and Japan.

If game programmers want to make investment themselves to popularize their games, they would have to spend big money to develop the infrastructure. They will have to make heavy investment in the server system, transmission line and bandwidth, or purchase big package services from Internet service providers (ISP).

Besides, CPs will also have to spend big money on building up the strategies on popularizing their products, have to spend money to find members, even though not all the members are ready to spend money on the services. These are really the biggest problems for small and medium CPs.

Meanwhile, if cooperating with social network owners, the small and medium CPs will be able to take full advantage of the existing infrastructure, the ready connection status and timely customer support service. If so, CPs just need to have one or two workers in charge of managing the apps and games provided online. The CPs can also take full advantage of the social networks to popularize their products, while no need to spend any money to build up distribution networks and online payment channel.

According to Tam, since the beginning of 2011, Hoang Phat has put “Emperor” game on Zing Me network and has obtained initial achievements: the revenue from the game has been increasing steadily.

Meanwhile, social networks’ owners also say they welcome the invitation for cooperation from CPs. Vuong Quang Khai, Deputy General Director of VNG, the owner of Zing Me social network, said that Zing Me is ready to share profits with CPs. As for exclusive apps and content, CPs would get 70 percent of revenue, while the profit share ratio would be 50-50 for non-exclusive products.

Challenges big

Despite the great advantages, many CPs still hesitate to join hands with social network developers.

Experts say that CPs would bear a hard pressure when providing services on social networks – the large communities. The opinions from clients will be different about the quality of services, therefore, CPs will have to harmonize the opinions and made reasonable decisions on the contents and the long term development strategies of the products.

As social networks have no border and time zone limitations, clients want to use services at any time. Therefore, CPs have to closely cooperate with online service providers in order to settle arising troubles.

As the products need to be upgraded regularly, both parties need to have reasonable solutions for data backups, or users would leave right after the first log-on.

However, experts say, the above said problems are just the “tip of the iceberg”. The key problem, according to them, lie in the fact that whether CPs and social networks’ investors can find a common voice.

Source: TBKTSG

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