The Operations Mindset: How China Modernized and Mastered Video Game LiveOps

Gamers are a notoriously grumpy bunch. They complain about a lot of things, and often rightfully so. In recent years, some of the most persistent grumbles from players involve the feeling that games are no longer finished products, or that they don’t own a game outright after a single purchase. They take issue with games shipped with tons of bugs, overpriced expansion packs, connectivity requirements, DRM restrictions, expensive season passes, and the feeling that features and content are deliberately held back in order to maximize profits.

To understand how we got here, it helps to take a look at where this model actually came from. So, in this post, let’s briefly explore the origins of LiveOps and live service games. And to do this, we’ll need to take a trip to the far East.

Early Pioneers: MUDs, Subscriptions, and Azeroth

To really understand how LiveOps have evolved, first we need to take a glance at the very early days of persistent online worlds.

Depending on how you define what a LiveOps game is, they can be found in the late 1980s in the form of text-based MUDs (Multi-user dungeons). Or if that seems like too big of a leap for you, we could say that the start of LiveOps really began with games like Ultima Online and EverQuest. These titles introduced the concept of “live” game worlds that required server maintenance and ongoing community management.

LiveOps Goes Mainstream: World of Warcraft

Despite the popularity of games like EverQuest, it was really World of Warcraft that christened the era of live service games and brought them to the mainstream.

World of Warcraft had:

• Time-based resets: Rare spawns died and re-appeared. Mobs died off and re-appeared.
• Seasonal events: Winter Veil, Hallow’s End, and other events drove predictable retention and reduced player churn
• Content patches: Expansions were broken up into smaller, predictable content updates.

Despite these elements that would later characterize most “live service games”, WoW was still fundamentally based on a “premium product” philosophy. You had to pay to get the game. Then you paid $15 a month to continue playing. The sheer size of the world, the endless lore, and refined class-based gameplay made it all worthwhile.

On another continent, however, game developers and publishers faced an entirely different reality when it came to economics, knowhow, and infrastructure. In this other world, LiveOps was the product itself.

Why China Pioneered the “Operations First” Mindset

While capitalized western studios were churning out high-budget hits, the Chinese gaming ecosystem in the early 2000s faced an entirely different reality. Few people owned computers, and even fewer still had access to high-speed internet. Consoles existed, but the vast majority of people could not afford them. There were gamers to be sure, but they comprised a tiny minority out of a country of 1.3 billion people.

1. Low Content, Low Budget Operations

In the early 2000s, there were few Chinese game developers or publishers. They didn’t have big budgets. They didn’t have the veteran animators or products that western studios possessed. Instead, they were building simple 2D games (like Legend of Mir) and lightweight browser-based MMORPGs that ran on flash.

Because these games lacked sophisticated gameplay mechanics, complex physics, or in-depth storylines, these Chinese companies had to do something different. If players could finish the game’s content in a matter of days, then what could be done to keep them playing and paying?

Their answer was to change the one variable they could afford to tweak: Community dynamics

2. The Birth of the “Operations Team”

I remember my first few days working at a Chinese game company. The overseas department had the typical teams you would expect: game developers, server technicians, advertising and marketing, art/creatives, customer service, etc. I found myself placed in the “Operations” team, and it was the biggest team in the office. What did all of these people do? As it turned out, the operations team did A LOT.

In Chinese game companies, the Operations Team was (and still is) integral to a game’s success. The operations team performed a fascinating mix of tasks.

The operations team’s work included:

• Planning in-game and community based events
• Looking at player behavior metrics and responding in real time
• Being present inside the game to chat with, flirt with, or entertain the biggest spenders
• Tracking engagement data and toggling events in real time (like double xp, rare drops, etc.)
• Manually spawning world bosses to spur a sense of urgency and cooperation
• Masquerading as real players and strutting around with the most expensive gear (to trigger more spending)
• Creating and merging game instances (they called them “servers”) to drive more engagement and competition amongst players

Events Replaced the Core Gameplay Loop

In the browser game era, these Chinese companies perfected event-driven engagement and spending. Events were planned and spaced in a way that provided players with a non-stop calendar of in-game activities in which to partake.

A typical Chinese LiveOps strategy splits events into a predictable pattern:

- Daily Quests/Events: Log-in rewards, check-ins, and timed world boss battles that would be scheduled in the afternoon or evening when students and adults had time to play.

- Weekly Rotations: PvP tournaments or time-limited modes that refreshed or recycled every week.

- Holiday Events: Massive, multi-week events matching Chinese holidays like Chinese New Year, Dragon Boat Festival, or Mid-Autumn Festival. These events would be planned in greater detail and include new side quests, time-limited drops, etc.

This operations-heavy strategy solved the problems associated with lack of content, subpar graphics and effects, and boring gameplay loops. Oddly enough, these tactics are now standard practice in almost all games.

Why Free to Play Was a Necessity

As mentioned earlier, back in the early-to-mid 2000s, many Chinese households still did not have desktop computers. Internet cafes dominated early Chinese gaming culture. So if players didn’t own PCs themselves, paying an upfront price for a game was a non-starter. Imagine buying a console or PC game and then having to take it somewhere other than your home to enjoy it. Then imagine paying the internet cafe a per-hour fee to play it. It makes no sense. This is why Chinese players are so accepting of the F2P model. It was the only way gaming was accessible to them.

If you’re a game publisher or developer and you can’t make money from a single purchase or a subscription fee, then the free to play, live service model becomes the only way to make money.

And this is why China became the pioneer in LiveOps and live service games. They had to. LiveOps was precisely the only way they could effectively monetize their games.

Conclusion

In China, the emphasis on LiveOps was less of a corporate strategy and more of a practical necessity.

Out of these constraints, a new business model in the gaming world took shape. The difference today is that many game companies are choosing the free to play, live service model specifically because they believe it can drive greater revenues and extend the lifespan of their games. Although most western players may not be aware of it, they are reacting negatively to a system that was born from scarcity in China but is being deployed from a situation of comparative abundance in the West.

So this is strange. The constraints that forced Chinese game companies to emphasize LiveOps no longer apply to them. China ranks second globally in gaming revenues, and it could be argued that Tencent is the largest game company on Earth. The irony is that a tactic born out of necessity turns out to be more profitable than the traditional publishing business models.