Startups

China’s game engine Cocos raises $50M, goes beyond games

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Image Credits: The Cocos engine (opens in a new window)

Cocos Technologies, a China-based game engine provider that has been around since 2010, just announced it has picked up $50 million in a Series B funding round in a bid to work on development and move beyond games. Investors include CCB Trust, a subsidiary of China Construction Bank, GGV Capital and real-time communication solution provider Agora, a long-time partner of Cocos.

Cocos is best known for its cross-platform, open source engine for 2D mobile games, but many have argued it has fallen behind in the 3D era. To play catchup, the Beijing-based company added 3D capabilities to its engine last year. The Chinese company is not aiming to take on behemoths like Unreal or Unity though; rather, it sets its sight on an overlooked trend — the revival of HTML5 web games in China and elsewhere. It’s also making forays into non-game scenarios like online education and autonomous driving.

Cocos is free to use, so over the years, it has generated capital from a mix of sources, including providing support and tutorials to third-party developers, getting funding from its Chinese parent Chukong and running gaming industry events.

It has a major deal with Huawei to let global developers build games that run on the phone maker’s in-house chips and HarmonyOS, billed as an alternative to Android. The company also supports Chinese search giant Baidu’s metaverse platform Xirang, though it declined to share how exactly they work together.

These revenue streams have been able to sustain Cocos, but the company is ready to accelerate growth, which is why it sought outside financing. Its team grew from about 100 employees 18 months ago to 300 as of this month, Luke Stapley, a marketing director at Cocos, told TechCrunch.

The mini game renaissance

Since launching on WeChat in 2017, HTML5 games, or what the Tencent-owned messenger calls “mini games,” have become a hit in China. For the past few years, Cocos has emerged as one of the main tools for building WeChat games. Most of these games are casual plays and monetize through ads rather than in-app purchases, which exempts them from acquiring the government-issued license that is increasingly hard to come by.

As a result, many Chinese indie game developers who lack the resource to apply for gaming permits are getting into HTML5, as that’s one of the few ways they can make money.

“The progression of mini games is a revolution in China,” suggested Stapley. The boom caught the eye of hardware makers like Vivo, which partnered up with Cocos to make its equivalent of mini games. “A lot of phone companies saw what WeChat was doing this and they said, hey, we would like to also have these mini games in our stores.”

Cocos powers about 60% of China’s mini games, Stapley claimed. The category is also taking off in Europe, where “people just love playing games,” and Southeast Asia, where many users “don’t have very good phones so H5 games are a lot easier to work with than high-end new games.”

Cocos says its engine has served 1.4 million developers across 203 countries and regions worldwide. China is its largest market, followed by the U.S. and Russia. South America and India are among its fastest-growing regions.

New arenas

Just as Unity has diversified its use cases into areas like architecture and aerospace, Cocos’s simulation technology has also found new applications. Many large online education companies have been using Cocos’s engine to create interactive online curricula, according to Stapley. A Chinese tech company that Cocos cannot name due to a non-disclosure agreement is using its engine to work on advanced driving solutions and smart cockpits.

Updated Cocos’ employee number.

WeChat reaches 1M mini programs, half the size of Apple’s App Store

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