From casual playthings to massively multi-player online worlds, Chinese game half-year revenue rose 16.9 percent from last year to 23.5 billion yuan ($3.7 billion), according to International Data Corp (via Shanghai Daily), with 71.6 percent earned at home.

Now some of China’s leading game operators are looking to go west, as the country’s explosive broadband and mobile adoption growth looks like slowing.

Shanda Games, one of the main publishers, has acquired a majority of German massively-multiplayer online game (MMOG) operator eFusion, which will partner with Shanda’s Eyedentity studio to promote Shanda’s big Dragon Nest MMPORG in Europe (via GamesIndustry.biz).

Shanda is not alone:

• MICGadget: “Perfect World, a Beijing-based online game company specializing in MMORPGs, expects overseas revenue to account for 30 percent of its total revenue this year, compared with 10 percent in 2011. Perfect World has already set up subsidiaries in the US, Europe and Japan.”
• Chinese web giant Tencent last year bought a majority of U.S. game studio Riot Games for $231.5 million.
• Shanda bought up another U.S. studio, Mochi Media.

U.S. players should be under no illusion – the Chinese online and game markets are super-advanced. Some 20.4 million active users on average played Shanda’s games in Q4 2011, with an average 4.5 million of them paying an average RMB 92.8 ($14.50) per month. Shanda has been trying to break outside of China. Licensing its games to portals in Thailand, Indonesia, Russia and Germany brought an 89 percent lift in international sales year-on-year.

Is that a threat to the west’s dominant Zynga and Playfish? Not necessarily. Zynga wants to help Chinese game developers in to America.

Zynga China GM Andy Tian has targeted “leveraging on Zynga’s platform, helping Chinese game developers expand into overseas market” (via TechNode) – more Chinese games are due to launch in the west in the next few months.

Partnership seems like the right approach. Many western companies entering China tend to fail thanks to cultural differences, lack of local business understanding and being shut out by protective authorities.

But Zynga will need to tread carefully, doing partnerships that work both at home and in the Far East, which continues to represent a market ripe for western involvement. Zynga’s top priority is strengthening partnerships with Tencent and Sina Weibo, according to Tian.

On Thursday it made its debut on iOS and Android, with PC, Mac and Windows Phone versions apparently on the way.

To be honest, there’s not much to say about Amazing Alex itself. It’s a physics puzzler in which you use a variety of objects to construct Domino Rally-style pathways that complete a task — such as moving a ball from one side of the screen to the other, or bursting a balloon. Cue comparisons with a million other titles out there, including big ones like Cut The Rope, and of course, Angry Birds.

In fact, it might look even more familiar than that: As rumors suggested, it does seem to be a pretty much a re-badging of a game called Casey’s Contraptions, which proved popular with players and was bought by Rovio recently. The art, design and most other things seem the same.

In fact, the core mechanic is pretty similar to Angry Birds, and the rest of the game owes it a great debt too. My first impressions were that it was a fairly strong example of its type, but didn’t quite have the destructive, chaotic element that makes Angry Birds so addictive. Plus on the iOS versions it was hit with a glitch that meant it couldn’t connect to Game Center, a problem which caused a bit of consternation.

@amazingalex I bought it half an hour ago. It won’t let me on game center.

— Cole Miller (@colewmiller) July 12, 2012

But generally reaction seems pretty good so far. It’s already selling well in the app stores: currently No3 in the iTunes paid apps as I speak.

So the big question: does it have staying power? That’s not clear. Very few games do.

But of course, Amazing Alex doesn’t need to be a megahit: Rovio is already making a ton of money. But it still has something to prove.

The company does need to show that it can generate success away from the Angry Birds franchise if it’s going to live up to its billing and become something of real significance. In this case, it seems to be trying to do that not by building a new game (remember, it infamously produced 51 non-hit games before Angry Birds) but in trying to use its marketing power to push existing IP into the stratosphere.

I’ve argued before that Rovio really needs to show it’s got more in the tank if it wants to meet its ambitions and go public — as it has said it wants to on many occasions.

Sure, it’s milking the Angry Birds brand for everything it can get, including games, toys, theme parks, the rest. But if it wants to build a Disney-style business, and not just burn on the bonfire of single-franchise entertainment properties, then it needs Amazing Alex to be right up there.

While MindCandy has bought IP before, this marks the first company-sized acquisition for hotly-tipped startup, and an interesting one too. Origami Blue was formed by refugees from Disney’s Black Rock studio, which was closed down in 2011. But although Black Rock specialized in racing games like MotoGP, it seems that Mind Candy is buying it for work they’ve since been doing on augmented reality applications and animation. The company said in a statement that the OB team would become the engine behind a new experimental development arm it’s calling “Candy Labs”.

But it looks like the company’s ambitions don’t end with a single purchase.

A recent job listing for a manager to work on M&A suggests that the company is looking for more than just the odd tumble — and may be at the start of a serious acquisition spree.

The ad, which ran a couple of months ago, suggests that more buyouts could be on the way.

Applicants would be required to “set strategy and source potential M&A and investment targets,” it says, monitor the market for potential movement and “determine bidding strategy and negotiate deals.”

It’s a big step from the company not least because it hints at an apparently strong financial position — achieved despite relatively modest venture funding from big names like Index and Accel.

While its last audited accounts show £1.2 million of profit on revenues of £7.5 million (that’s $1.8 million on $11.6 million), they go back to the end of 2010. Since then, the company has increased its user base to around 75 million people globally, and last year Spark Ventures cashed out in a move that valued the company at $200 million. In the meantime, Mind Candy boss Michael Acton Smith says “”our valuation is now substantially higher than that” and the business has been talked up as a potential IPO candidate.

Side note: interestingly one of Moshi’s biggest competitors, Club Penguin, (which is also owned by Disney) has its UK headquarters just a stone’s throw from Origami Blue’s offices.

Update: Clarified MindCandy’s 2009 purchase of the website Tutpup, which Acton Smith says “was a simple IP acquisition. No staff came across with the deal.”

Playfish co-founders Shukri Shammas and Sami Lababidi founded London-based Mindshapes together with David Begg, Chrisian Dorffer and Tareq Naqib in 2010 to make interactive education games for kids on multiple platforms.

Now it is taking money led by Index Ventures together with Richmond Park Partners and previous backers.

The company last took a $5 million first investment round in November 2011. It did not say why it is taking the second investment, six months later.

So far, Mindshapes has developed Magic Town, a virtual world that launched on web on May 16 and includes 70 stories from 15 children’s book publishers including Hachette, Simon & Schuster and Penguin. The service plans to launch on iOS this summer and include 200 stories by year’s end.

The outfit also wants to target elder users, with an upcoming learning game, Language City London, aimed at the 16-to-30 market.

“Users will also be able to buy access to premium chapters based on licensed entertainment brands,” according to the company.

The BBC’s commercial and overseas unit is investing an unspecified sum in Spaceport, whose technology leverages HTML5, Javascript and OpenGL to let creators convert vector graphics-based games for multiple platforms.

This is a second investment round for Burlingame, California-based Spaceport, which is incubated at YouWeb, which supported the development of the OpenFeint social gaming network.

BBC Worldwide has “a view to use Spaceport.io’s technology to design its next generation of games and apps” on mobile and connected TV, Spaceport says. The first fruits of their relationship are due this summer.

The stake it is taking in Spaceport is not thought to be significant.

BBC Worldwide has released almost 40 games on brands like Doctor Who and Top Gear in the last two years.

With a burgeoning number of platforms for which to develop, some content owners are now looking beyond iOS but want to do so in a cost-effective manner.

FT Group this January acquired Assanka, the mobile design agency which built its HTML5 web app, the alternative to its iOS counterpart.

But this isn’t strictly a content play. The division, IPC Play, will create “advergames” – marketing game-candy designed as digital adjuncts to the space sold to magazine advertisers.

Making the games will be Mousebreaker, the minigame developer IPC acquired back in 2008, and Feelgood Games, the female-focused casual games brand IPC launched in 2011.

To promote the division itself, IPC is inviting media agency staff themselves to play its own game – Planner, Buyer, Fire – to win an office pool table and other prizes.

IPC has previously built game campaigns for Land Rover, Barbour, Disney, Pepsi Max and P&G, but is now formally offering it as part of its advertising line-up.

Turnaround firm OptCapita, through Baker Acquisitions, will buy its UK assets, comprising the 333 out of 609 that weren’t closed last week and almost 3,200 staff.

“This is good news for Game and for UK consumers,” says games industry umbrella group TIGA’s CEO Dr Richard Wilson. “This deal should save many jobs and stores and will buy Game breathing space during which it can develop a new business strategy.

“Game has suffered from physical and online competition, the shift from physical to digital games, and the decision by big global publishers not to stock Game with new releases.

“Given the rapid transition to digital gaming with consumers spending money on platforms such as Steam, Origin, the App Store, PSN, XBLA and Android market, Game will have to develop a digital strategy – fast.”

Last week, paidContent:UK reported how Game Group, several years ago, declined to adopt a proposed strategy that identified a 2012 tipping point from physical to digital sales and that could have given it a viable digital strategy.

It has since been pointed out to us that Game tried a digital strategy a decade ago when it bought online multiplayer gaming service BarrysWorld, to create its own such service, which it later closed.

OpCapita managing partner Henry Jackson: “We strongly believe there is a place on the high street for a video gaming specialist and Game is the leading brand in a £2.8 billion market in the UK.

“We have assembled a strong team of experienced industry operators to implement the programme of operational change that is needed. There is a huge amount to do but we look forward to the challenge of restoring Game’s fortunes in partnership with its employees and suppliers.”

PwC shut 277 of Game’s 609 UK and Ireland stores and made 2,104 out of 5,126 staff redundant when it was called in as administrator last week.

PwC promptly shut 277 of its 609 UK and Ireland stores, making 2,104 out of 5,126 staff redundant, but said “a number of parties have expressed an interest in purchasing part or all of the business and assets of the group”.

It didn’t have to be this way. paidContent understands Game Group, three years ago, sought strategic proposals for survival in the years ahead…

• Executives were given a strategy that made clear the industry would see a tipping point from physical to digital game distribution in 2012.
• In response, the strategy recommended cutting down on bricks-and-mortar store count.
• And it made suggestions for using the Game brand to power digital storefronts on PC, console and other platforms.

But paidContent understands Game, under then-CEO Lisa Morgan, did not adopt the strategy, deciding instead that such an advance was not necessary.

At a time when Game was being urged to swap bricks for clicks, it made an even bigger foray in to the high street by acquiring Gamestation. Now it is not uncommon, in some towns and cities, to find two Game stores and an additional remaining Gamestation just a few streets apart.

And Game has been caught in a perfect storm…

• Reliant on console hardware, it has hurt as Microsoft (NSDQ: MSFT), Nintendo and Sony (NYSE: SNE) have introduced new input peripherals but not new machines.
• Dependent on A-list titles and Christmas software sales, it has watched as consumer spending has been impacted and as game choice has contracted around a few, expensive-to-produce franchises.
• Game’s innovative pre-owned retail channel has also made frenemies out of some publishers, which have limited certain features only to first-time buyers or, latterly, subscribers.

Game publishers are more bullish than ever about the prospects for generating such in-game revenue directly from players. And a growing number of titles is available through Xbox Live Arcade, for example.

But the console sector is not yet ready to wholeheartedly abandon plastic-box distribution – tier-A titles are priced at a hefty premium over even the pricey equivalents stocked on Game’s shelves.

That does not necessarily mean a console opportunity for Game, however – although it launched a PC download service, the console retail channel is locked up for operation entirely by the console makers.

In the remaining space, Game recently introduced a version of a digital strategy of its own…

• Selling points cards for Facebook Credits, Zynga games, Xbox Live and Playstation Network.
• It has also tried to secure publisher agreement for exclusive digital content access with boxed titles sold in Game.
• In October, it introduced its own system for online game transactions, GameWallet, adopted sparsely.
• And it had also sought an early foothold in the OnLive cloud game service.

In 2010/11, Game’s digital revenue increased by 27 percent to £41 million.

But, having passed on the earlier digital opportunity, it seemed too little, too late. Now administrators’ priority is likely to strip significant high street presence out of the company, especially where duplication occurs around the UK.

“The group has faced serious cashflow and profit issues over the recent past,” PwC’s joint administrator Mike Jervis told investors. “It also has suffered from high fixed costs, an ambitious international roll-out and fluctuating working capital requirements.

“Despite these challenges, we believe that there is room for a specialist game retailer in the territories in which it operates, including its biggest one, the UK. As a result we are hopeful that a going concern sale of the business is achievable.”

Game’s young staff have always been very helpful and knowledgeable in my experience. Gamers should hope that many of them get to carry on working in a right-sized high street retail business that can go on selling games on discs, until either the industry truly tips to digital or Game can forge a digital path of its own.

Well there we have it. Just had the phonecall to say Game is in adminstration and I have now been made redundant.

— Heather Lawrence (@exeliax) March 26, 2012

Just evacuated all customers an told to close store #GAME

— kyle alleyne (@daddyka89) March 26, 2012

Just been made REDUNDANT KMT #GAME full of shit

— kyle alleyne (@daddyka89) March 26, 2012

Yup, been made redundant. Just been told I need to work out the week to help pack up and my Game store is closed for good…

— Jordan Cormican (@JrdRIOT) March 26, 2012

One sad thing about GAME is that so many young people will be made redundant. Many work lives start there – this isn’t a nice start.

— Alex Donaldson (@APZonerunner) March 26, 2012

So a friend just got made redundant a few minutes into her shift at GameStation. it’s going well then. #GAME

— Jennifer Taylor (@littlejuicebox1) March 26, 2012

Very sad day indeed.Forever proud of my former GAME and gamestation colleagues who have shown such dignity and fought so hard

— Ian Shepherd (@IanAShepherd) March 26, 2012

It breaks my heart to see a business made up of such magnificent people come to this and yes, I think we should have been able to avoid it.

— Ian Shepherd (@IanAShepherd) March 26, 2012

@GeorgeMacD thanks George, I’ve appreciated the feedback today but no getting away from the fact that this happened on mywatch.

— Ian Shepherd (@IanAShepherd) March 26, 2012

The catch-up TV service on Tuesday became the latest TV app to launch in the Xbox Dashboard’s app initiative, for free with no subscription requirement (announcement).

Although the BBC has become reluctant to custom-build iPlayer apps for the burgeoning number of new devices, Xbox Kinect’s TV interface represents a sufficiently interesting new opportunity.

Users can swipe through iPlayer’s menus as well as navigate programming by voice control.

iPlayer had been available on Wii and Playstation 3 as an app and through the web browser for some time now. They made up five percent of iPlayer requests in September.

The BBC’s Xbox delay were the Xbox’s lack of web browser and, paidContent understands, that Microsoft (NSDQ: MSFT) had initially wanted to give access only to paid-up Xbox Live Gold members – something which would have run contrary to the stipulation that the BBC must provide its services free at the point of use to UK license fee payers.

But Microsoft’s stance thawed late in 2011 when it announced several TV partners would bring in Xbox apps that could be outside as well as inside its Gold subscription.

I would expect Xbox to become one of the platforms on which iPlayer is most used.

According to lawyer Sean Kane, 21 states and all 10 Canadian provinces are now vying for a slice of the video game pie. He says that many places are retooling incentive packages that were originally put in place to attract movie productions.

“A lot of jurisdictions like game companies better than films because the film industry is transient.” said Kane, who advises gaming clients about incentives at Pillsbury. He added that a gaming hub can mean hundreds of very well paid individuals settling down in an area.

While Northern California remains the pre-eminent hub for game developers, places like North Carolina and Rhode Island are creating hubs of their own through aggressive loan and tax incentives. In some states, like Louisiana, the incentives are in the form of cash subsidies that can be redeemed or exchanged.

Kane says the incentive led game giant Electronic Arts (NSDQ: ERTS) to build testing facilities near Louisiana State University that employ 600 people.

The subsidies are not universally popular and one New Orleans study suggested they are not worth it (in the case of films at least). As for Schilling’s 38 Studios, the Rhode Island governor initially questioned the wisdom of offering a $75 million loan guarantee to someone who he said might have faked a famous World Series incident involving bloody sock.

Schilling himself appears to be thriving in Rhode Island. His studio last month released “Kingdoms of Amalur: Reckoning,” a fantasy game designed by industry luminary R.A.Salvatore.