Shanghai’s The9 Will Get to Run Sony Ericsson’s App Store in China

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By Kim-Mai Cutler Comments

The9, the Shanghai-based company that is pivoting to mobile gaming after its glory days of operating World of Warcraft in China, may have another revenue stream up its sleeve.

Sony Ericsson has tapped the company to run its local app store in China, where it offer games and other content like ringtones, according to AllThingsD. The9 will be the exclusive operator of Sony Ericsson’s PlayNow app store, for which it will test, market and support third-party apps. There are 50 right now.

The number of Android variants in China plus Google’s inability to make headway in its relationship with the government is an opportunity for carriers and device makers to have a more powerful role in the app ecosystem. Because Google’s official Android Market doesn’t have a secure place as the leading distributor of Android apps, many alternative stores are flourishing in its place like HiAPK, GoAPK and AppChina. Bigger players like Chinese social networking and IM giant Tencent have also gotten into the fray.

So it’s not surprising that an OEM like Sony Ericsson would be interested in this as well, provided a well-connected local partner. Custom app stores are a way for carriers and device makers make their products stand out against what could be a sea of undifferentiated, commoditized Android phones.

As for The9, the company is trying to make a comeback around iOS and Android after losing the license to publish World of Warcraft in China, a move that made its annual revenue decline from 1.7 billion Chinese yuan ($269 million) in 2008 to 108.2 million yuan ($16.2 million) in 2010.

With the remaining capital on its books, The9 has placed all of its chips in smartphone gaming. It recently launched a $100 million mobile fund with Chengwei Ventures, ChinaRock Capital Management and China Renaissance K2 Ventures that may help it source new lucrative intellectual property for the local markets.

It also recently partnered with OpenFeint to localize the company’s platform for the Chinese market (since many U.S. or Japanese-operated gaming networks will naturally have problems coming to China because of censorship issues or because they don’t understand the tastes of local consumers).

The9 faces competition from web giants like Tencent, which has its own app store baked into an Android skin, and venture-backed companies like Beijing’s PapayaMobile.