New reports from Niko Partners are predicting that China’s thriving game market will eventually earn $57 billion in revenue by 2027. Even with increasing legislative crackdowns and pandemic restrictions, the Chinese gaming market (console, PC, and mobile) has acquired enormous success as it collected around $45.5 billion in 2022. The report also mentions that China has over 730 million players, with gaming being dominated by mobile (66%), followed by PC (31%), and console (3%).
Increased Popularity of Mobile Esports in China
The report further indicates that mobile esports are widely recognized in the Chinese market through mobile game tournaments. In total, over half of the 102 held tournaments involved mobile titles, for example, Tencent’s Honor of Kings. This mobile games tournament offered a prize pool of $14.7 million.
Niko Partners also predicts that Tencent’s Overwatch-Counter Strike cocktail, the highly anticipated Valorant, set to release in China this year, will witness huge success.
CCEO and founder of Niko Partners, Lisa Hanson, is optimistic about the Chinese game market’s future. “Chinese game companies are expanding globally, and they are investing at higher rates than ever.”
“PC game revenues generated overseas by Chinese owned companies rose by 22% in 2022 and is expected to grow by a 13.8% CAGR through 2027 – which is higher than the domestic growth rate by a significant margin. You must get to know Chinese developers and publishers both in the domestic market and abroad if you are serious about the global games industry.”
Clouds on the Horizon
Though it is great news for China’s game industry, it does not mark a risk-free path. The video game licensing freeze, coupled with the crackdown on tech giants and game makers, has made many skeptical about continuing operations in the country.
However, Tencent and NetEase, NetEase’s opening of new studios in Europe and elsewhere, is taking a different approach. Tencent has made significant offshore investments and licensed its games for foreign markets.
Gamebake’s Michael Hudson and Sandsoft’s Lauren Lu shared their thoughts on the effect of the freeze on developers’ and game makers’ interests in expanding into China. “There are periodic policy adjustments, meaning that domestic and foreign publishers need to be prepared for sudden changes. Over the past five years, ISBN licences approvals have been suspended twice. Foreign game developers and publishers typically work with a Chinese publisher to navigate the licensing and operational challenges of the Chinese market,” Lu explained.
Despite these challenges, The outlook seems bright for China’s gaming market. According to Niko Partners’ report, it projects a bright gaming market vision in China that shows no signs of slowing or contracting in the near future.