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Hot Mobile Game Companies Are Just Pigs 'Standing on a Wind Hole'

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Perfect World CEO Robert Xiao says many mobile-game makers are lucky, like "a pig standing on a wind hole."0xA0Photographer: Daniel Acker/Bloomberg

Robert Xiao is the head of one of China's oldest video-game companies. The rise of mobile gaming should probably keep him up at night, but the CEO of Perfect World isn't intimidated by the new kids in town.

As investors and gamers go crazy for the latest overnight app craze, Xiao characterized the mobile-gaming startups as a flash in the pan. In an interview in San Francisco, Xiao struggled to describe his competitors' right-place-at-the-right-time fortune using a Chinese proverb.

"If a pig is standing on a — how do you say that in English? — a, a," said Xiao, who paused for around 10 seconds, searching for possible phrases.

"A wind hole," he finally said, "even the pig can fly."

Xiao may not be the next Confucius, but his careful growth strategy for Perfect World has served the Beijing-based company well. The publicly traded stock is up 67 percent this year. Perfect World primarily makes PC software, still a big business in China, with games such as "Neverwinter" and "Star Trek Online." Outside of China, the company has operations in Europe, Japan, Korea and the U.S., where more than 340 people work in its Silicon Valley offices.

Perfect World's most important focus is on global expansion, said Xiao. Among the company's targets is North America and the Middle East. Perfect World's "Saint Seiya Online" is big in Japan, France and Brazil, he said. The nearly decade-old company published its first game in Turkey this year.

"We're not like many of the young companies that are trying to expand as fast as possible," Xiao said.

Perfect World hasn't completely ignored mobile. The company's "Elemental Kingdoms" is among the top 300 iOS games by revenue, according to researcher AppData. But Xiao is more optimistic about bringing the company's existing and new properties to home consoles. The Xbox, PlayStation and other game systems are still banned in China , so Xiao's console ambitions are geared toward its international customers.

"Console is more conservative but more stable," Xiao said. "The big-screen experience is not replaceable."

Creating a formula that works on consoles is a surer bet, said Xiao, than trying to find a wind hole for his smartphone games.

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