Interesting, it was my understanding that foreign companies needed to partner with a Chinese company to do business in China. I wonder if my understanding was incorrect or there's some sort of mechanism in play that allows the foreign company to "naturalize" over time.
It is correct, to release games there it's pretty complex/different for foreigners: need to be published by a Chinese company, the games need fo follow different country/region specific regulations (meaning, they censor different things than the one in Japan, Australia, Germany, US, etc), the localization often it's complex because beyond the translation there are some changes needed to culturally adapt the games a bit because many things have different meanings there and can be problematic/misunderstood even if not forbidden by the regulations (like meanings of colors, poses, corpses/skulls etc), they use different social media so communication and ads work in a different way, etc.
And well, the market has a different behaviour regarding platforms (more focused in PC for AAA, and mainly in mobile gaming in general), business models (more skewed to GaaS, specially F2P), genres, game publishing (you can't directly release a game, there's an entity -let's say their 'ESRB/PEGI' where you submit the game and then they review it and later approve games in non-periodical batches that can be issued every few days or every several months- etc.
What foreigner companies typically do is to partner with a local gaming company to handle all these things for them. And sometimes -as happened here- end buying them (no need to be a full acquisition) and turning it into a subsidiary.
Please also notice that a subsidiary, even if it belongs / is owned / ruled by somebody, it's formally a separate company. Meaning, as an example Ubisoft did buy the Spanish studio where I did work. The subsidiary of our studio was a Spanish company paying the taxes and following the Spanish regulations, but in the board of directors had guy from the Ubisoft HQ and basically all we did was in line with them. And we made transactions with other Ubi studios like to pay them for services (as could be to do some art support, localization or testing for us), or to get funding for games / milestones as if we were separate companies.
Like in Spain, in China Ubisoft had two subsidiaries: I did work weekly with one of them (Ubisoft Shanghai), sending them the social media posts of my studio's games and studio social media accounts, plus screenshots, trailers, store assets we had planned for the communitations of that week, so they could adapt and publish them to the Chinese social media networks, Chinese game stores, Chinese gaming media, local influencers, etc. Also sent them new game logos, texts, character designs, backgrounds etc. we added in new games or game updates to be localized if needed. Plus also new builds to test them and provide Chinese specific localization feedback if needed.
So technically Ubisoft Shanghai was/is a Chinese company, but also a subsidiary, and we did work with them internally like with any other Ubisoft subsidiary.
Separate with this, there's the relationship with Tencent, basically the main platform holder, main social media company and main paid ads channel for that country. Back then we had a very good relationship -I assume even better now- with them, like for the rest of the world with Sony / Nintendo / MS / Apple / Google Play / Amazon / Meta / Twitter / Youtube / Google Ads / a gazillion more.
Many countries or regions have specific things, and China is the most different one, but at least in our case the people from the local subsidiary and Tencent were always very open, supportive and helpful. Like most people in the rest of the world in big companies, people is very proffesional and focused to get things done asap and in the best possible way for both parts.
