The two largest mobile game makers in the world, Tencent and NetEase, generated over 80% of China’s top ten gaming companies’ revenue from January to March 2023, as Yicai Global reports. Despite a bumpy year for the mobile gaming industry in 2022 due to IDFA regulation changes and the normalization of the market after Covid-19, both companies managed to avoid a decrease in operating revenue, making them some of China’s top ten game developers for the quarter. Seven of the top ten mobile games in Q1 were published by Tencent or NetEase, making them two of the most powerful companies in the world when it comes to mobile gaming.

The Companies’ Market Dominance

Tencent’s operating revenue rose 11% to 48.3 billion yuan ($6.8 billion), while domestic revenue rose 6.4% to 35.1 billion yuan ($4.93 billion), making it responsible for around 50% of the quarter’s domestic market revenue. Overseas revenue experienced an unprecedented 25% increase, reaching 13.2 billion yuan ($1.86 billion). Meanwhile, NetEase saw a 7.6% year-on-year increase in operating revenue from games, collecting around 20.1 billion yuan ($2.86 billion) and bringing mobile gaming revenue to approximately 80% of the company’s total revenue.

Possibility of New Competitors

It’s extremely likely that Tencent and NetEase will face new competition in the future, as more game licences are scheduled to be released. This could provide local game makers with more opportunities to boost their market share by developing new games. For instance, MiHoYo’s game Honkai: Star Rail had a record-breaking 20 million downloads in its first two days following its launch, and the Financial Times reported that MiHoYo is looking to compete with Tencent for China’s gaming market crown. We previously acknowledged NetEase, Tencent, and MiHoYo as three of the top 50 mobile game makers of 2022.