China dominates the mobile gaming industry with Chinese companies generating 47% of gaming revenue
China's gaming industry is dominated by Tencent and NetEase, who hold a significant share of the market. According to a report by Niko Partners, Chinese game companies contribute to nearly half of the global mobile gaming revenue and 39% of PC games revenue worldwide, including revenue generated domestically. Additionally, 42.8% of active gaming and esports consumers in China make monthly in-game purchases, highlighting the country's strong presence in the gaming and esports industry.
China is The Undisputed King of the Global Mobile Games Revenue. China dominates the mobile gaming industry with Chinese companies generating 47% of gaming revenue
Chinese game companies are experiencing tremendous growth, and they are not afraid to make bold moves at substantially higher rates, according to Lisa Hanson, the CEO and founder of Niko Partners. Revenue from internationally produced PC games by Chinese corporations saw an uptick of 22% in 2022, with projected growth standing at a 13.8% compound annual growth rate (CAGR) up to 2027. This growth trajectory surpasses the domestic rate by a considerable extent. Hanson advises that getting to know Chinese developers and publishers, both in the domestic market and abroad, is crucial for those serious about the global games industry. Niko Partners' research projects the Chinese games market to expand, amassing $57 billion in revenues by 2027. Despite China's population shrinking in recent years, the number of Chinese gamers is expected to grow to reach 730 million by 2027.
China dominates the mobile gaming industry with Chinese companies generating 47% of gaming revenue.
Gamer spending in the domestic gaming market is dominated by mobile games at 66%, followed by PC games at 31% and console games at 3%. The Chinese gaming market is heavily focused on mobile games, with Tencent and NetEase accounting for 61% of domestic revenue for PC and mobile games in 2022. Despite a slight decrease in their joint market share, both companies saw positive earnings in Q1 2023.
Unleashing the Dragon – The Growth Spurt in China’s Mobile Gaming Arena
Mobile gaming has become popular in China due to the drop in smartphone prices and fewer restrictions compared to PC gaming. By 2012, China had over one billion mobile phone subscriptions. Console bans were lifted in 2010, but mobile gaming had already established itself. China's mobile gaming market is the most profitable globally, with revenue reaching almost $30 billion in 2020. Chinese game developers are also making an impact on the global gaming scene, with overseas game revenues growing faster than the domestic market.
Exploding Revenues But A Difficult Market To Navigate
The vast Chinese mobile gaming industry is bursting with mouthwatering revenues but the barriers to entry tend to lock out many domestic and international developer studios. For game development studios to successfully navigate the market, they need to have specialized local talent that understands the nitty-gritty of the landscape.
China's mobile games market is highly regulated and changes frequently, making it difficult for foreign competitors to enter without a local advisor. However, success in this industry does not guarantee massive revenue as companies must also focus on user acquisition and marketing. To navigate the market, both foreign and domestic game developers should seek the assistance of a reliable local partner to manage advertising, social media, and influencer campaigns. Despite the challenges, China remains the top global market for games revenue and number of gamers.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.