Over the past decade, China’s gaming industry has experienced explosive growth, overtake the united states in Market size and spawned global publishing giants like Tencent and NetEase. The boom is due in part to a population that was rapidly connecting and gaining purchasing power. But the heyday is over as the market approaches saturation and consumers tighten their wallets during economic headwinds.
China’s video game sector posted a decline in sales for the first time since at least 2005, according to earlier reports (attached below) from the country’s main gaming industry association. The market raked in 265.9 billion yuan ($39 billion) from video game sales in 2022, a year-on-year drop of 10.33%, according to a report. new report released by the association on Tuesday. The total size of users decreased to 664 million, 0.33% less than the previous year.
The falls added to the pressure on an already struggling industry. In recent years, China has launched a host of crackdowns on video gamesclamping down on content that is ideologically objectionable other limit game time between underage users. Amid the industry shakeup, regulators stopped issuing new gambling permits for months; the process has resumed but now it takes longer and costs more for companies to comply.
To carve out new growth opportunities, developers, from rudimentary studios to giants like Tencent, are heading abroad. Chinese games have been exported for years, but in recent times they have started to make a dent in the West. Towards the end of 2020, titles made in China accounted for up to 20% of mobile gaming revenue in the US, according to market research firm Sensor Tower. Last July, 39 of the top 100 mobile games by revenue worldwide were from Chinese companies.
The ratio might even be higher in reality, as Chinese game developers, like other types of internet services, are increasingly trying to hide their origins to avoid the backlash of being labeled “Chinese.” India, for example, has banned hundreds of Chinese apps in recent years, including the worldwide hit PUBG Mobileas its relations with China deteriorated.
Chinese-made games posted another promising year in 2022 regardless, racking up $17.3 billion in overseas sales, according to the industry report. Although the figure slid 3.7% year-on-year, the drop was much less substantial than that of domestic sales.
China has a reputation for making lucrative and addictive mobile games, but its gaming giants now have ambitions to develop big-budget global hits that will stand the test of time. Tencent, the world’s largest gaming company by revenue, has a AAA console game in the works at their Lightspeed outpost in Los Angeles (Lightspeed is famous for designing the mobile version of PUBG). Tencent’s nemesis NetEase is also busy setting up shop abroad. having announced his first US office in Austen last Maythe firm recently teased another new study.