Chinese companies have been exporting to the U.S. for a very long time, and very successfully at that. However, they haven’t been doing much of their own marketing, branding and distribution. No surprise, really. In some ways, branding issues aside, this is how U.S. companies broke into the China market. For foreign companies, there was no choice for a long time, as distribution was restricted on a number of fronts (but pretty much opened up from 2004).

As foreign companies racked up more years in China, hired more local managers, and after the laws changed, the entire post-manufacturing chain was taken away from the domestic entities. Foreign companies have had big problems adapting to this unique market, but they’ve made tremendous progress over the years.

Now there are lots of successful Chinese companies looking to break into overseas markets, and not just with the traditional manufacturing exports. Those are easy compared to services, information technology, and anything that might need localization.

And games. Specifically online games.

China’s biggest online game companies are increasingly looking to offer games in the U.S., bringing with them a game model where users play for free but must pay to get certain power-ups for their characters.

Sounds like a good idea? Gaming companies here are doing very well, and their business model is very different from that of most U.S. games, which are based on monthly fees. Maybe there is an untapped U.S. market for folks who would be attracted to the “no fee” system.

Perhaps. But that assumes that the group in question would be attracted to China-type games.

Many popular online games in China draw on well-known cultural themes like martial arts or the wars of the nation’s ancient Three Kingdoms era.

Martial arts is always a popular theme, but China history-based warfare? I don’t think so. It’s no accident that U.S. war action/shooter games have players pitted against Nazi, Japanese, or Soviet forces (in addition to zombies). WWII is about the only “historical” war that kids today are familiar with and that developers are comfortable with exploiting. Vietnam is on kids’ radar screen as well, but America still has problems with that particular experience. The Iraq War might have some potential in the future, but probably only for “bad boy” developers like Rockstar; maybe a GTA-type game where you can rack up points by torturing prisoners.

American kids can’t find China on a map, and they certainly don’t know any Chinese history. Having characters running around with swords is always good for some players, but if these games are at all story-driven, you are going to have a lot of confused, and bored, kids out there.

[Diana] Li of Shanda argued the U.S. online game market is at an early stage and has room for new titles to rise alongside leaders like World of Warcraft. When asked if Shanda would revise game content to fit the new market, Li said its U.S. plans involved games that would appeal to users anywhere.

That’s a mighty big assumption. I hope these guys are not thinking that since games like World of Warcraft have been successful here in China, it should work in the opposite direction for Chinese games. That’s dangerous thinking.

The reasons why certain Western games work in China: 1) there is already a broad knowledge of the context/story of the game due to the adoption of Western media; or 2) the game appeals to folks anywhere.

I think reason #1 is much more applicable than #2. Let’s face it, once you’ve seen a bit of Hollywood and seen some American television, no matter what country you live in, you will “get” most of the games out there. Watch Lord of the Rings, for example, and you automatically feel comfortable with pretty much any fantasy RPG.

What’s the analog with U.S. media consumers? Are a lot of American kids going to be watching the latest Confucius biopic? The presence of Chow Yun Fat might fool some of them into thinking it’s a martial arts picture, but aside from those chumps, I don’t think it’s going to be too popular in the States, and certainly not in the gaming demographic. American kids no nothing about China beyond Jackie Chan and the martial arts genre in a broad sense. That’s about it.

If Chinese game companies want to be successful in the U.S., they better not rely solely on their low-entry-cost business model. They will definitely need to localize, and not just English translation and getting rid of insipid Japanese-style cutesy animation — story lines will have to be overhauled or scrapped. It might be tough to admit it, but outside of East Asia, Chinese history is about as well known to most gamers as is regular exercise and a healthy diet.