China's Games Market: Facts & Stats

Art By: Giulia Sfogliarini 

Here are some traits of the Chinese gaming market:

• One of the biggest game industries in the world (revenue $45.5 billion in 2022);
• Has a large number of gamers (664 million in 2022), and that figure is expected to increase to 730 million by 2027 (growth is about 10%);
• Mobile and PC games are the most popular categories of games; they bring the highest share of revenue worldwide (47% and 39% respectively);
• The F2P monetization method prevails among Chinese game developers. Players are also used to this model because of previous restrictions and the economic situation;
• The premium monetization model isn't widespread but gaining popularity.
  
  

How Is It Played in China?

China’s game market revenue — which covers mobile, PC, and console games — increased to $45.5 billion in 2022. This figure is predicted to grow by 25% ($57 billion) by 2027. 

Despite the fact that the Chinese population is decreasing, the number of players is rising. From 2012 to 2021, this figure increased by 62.5%. But in 2022, there was a slight reduction of 1% compared to the previous year, which can be connected with game restrictions for minors (minors can only play games for one hour from 8 to 9 p.m. on Fridays, weekends, and public holidays). However, experts’ forecast is optimistic: the number of players is expected to increase to 730 million by 2027. 

Right now, 46% of the population play video games, including 300 million women. The average age of Chinese gamers is 35, and ARPU (average revenue per user) is $64. 

The most popular game genres among Chinese players:

The most popular type of game is mobile: 66% of players’ money is spent on them. Below is a diagram of domestic games market revenue depending on user spending: 

Now, let’s look at them in more detail.

Domination of Mobile: 47% of Worldwide Revenue

Chinese game studios reach players all over the world, receiving 47% of global mobile game revenue. Furthermore, 38 Chinese mobile game publishers are in the top 100 of the global mobile game manufacturers revenue list. In the domestic market, mobile game revenue was $30.1 billion in 2022. 

Google Play is unavailable in China, while the App Store is controlled by the government, which can delete apps. However, 24% of mobile games from Chinese publishers are available on both iOS and Android. 

Google Play has more than 2,015 Chinese mobile game publishers (1% of all publishers). Chinese publishers have released more than 8,537 mobile games, with an average rating of 3.79 (out of 5). On average, these mobile games have 1.25 million downloads, which is 2 times more than the average global indicator. Despite this fact, none of the Chinese games are in the top 15 games on Google Play. 

There are several monetization models used by Chinese mobile developers:

PC & Consoles: 39% of Worldwide Revenue 

Chinese PC games are also popular worldwide: their share is 39% in global PC gaming revenue. As for the domestic market revenue, it was $14.2 billion in 2022. 

"PC game revenue 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." Lisa Hanson, Niko CEO & Founder, said.

The domestic console games market was valued at $2.29 billion in 2022, which is 7.8% higher compared to the previous year.

Gamedev Duopoly

• The industry is represented by Tencent, NetEase, and “Others.” So, it’s a duopoly, where two world giants bring China the highest percentage of all game revenue. 
• Chinese companies Tencent and NetEase are leaders among other studios around the world: their revenue is tens of times higher than the revenue of many major game companies in the US and Europe. So, Chinese game revenue is concentrated in these two giants, whereas in other countries, game revenue is more dispersed across the market.
• Compared to the US and Europe, China has far fewer game studios, but Chinese game spending as a percentage of GDP is higher than in Western countries. However, taking third place, China is behind other Asian countries like Japan and Korea.
• Due to Chinese government restrictions, game developers started to release fewer games and foreign studios weren't able to promote their game projects to the Chinese market. However, with the removal of the import ban, this trend is expected to decline. In 2023, the number of licensed games could be larger than in both 2021 and 2022.
  

The Chinese game development market is characterized by a duopoly: Tencent and NetEase are the biggest companies in the country. They represent 61% of the market share and together they bring in more than 80% of Chinese game revenue. They are also significant international players and have positive results in game sales worldwide. 

Tencent’s revenue increased by 13 times from 2012 to 2021. However, in 2022, there was a small drop of 5.08%, and this figure was about $82 billion in the domestic and overseas markets. 

As for NetEase, its revenue grew throughout the whole period from 2009 to 2022. It increased by approximately 26 times so that in 2022, revenue grew to $13 billion in both internal and foreign markets.

It’s worth noting that there are 771 game companies in the country. Aside from Tencent and NetEase, the Chinese gamedev market is lucrative for the following game developers:

The revenue of the majority of game companies shrank in the first 3 months of 2023 because of a smaller number of gamers, the slower pace of new game releases, and lower revenue from existing game projects. State crackdown on Chinese games and restrictions for minors are the main sources of that problem. Furthermore, there was an 18-month import ban that ended at the end of 2022. So last year, the Chinese government approved only 44 imported games adapted to the domestic market. As for the internal game market, there were 468 video games that received licenses in 2022. 

However, the game release forecast is positive. Niko Partners predicts that the government will approve more than 1,000 domestic games and 100 imported games in 2023, which will exceed the games launched in 2021 and 2022.

As for the European gaming industry, there are 4,600 game development studios that brought a revenue of $30 billion in 2022. The UK, Germany, and France generate the most revenue. 

Although the Chinese market is inferior to the US gaming industry in terms of total revenue, it’s very important to compare markets within the framework of the share of game spending relative to GDP because these countries have different living standards. In this case, the Asian gaming sphere outperforms both the US and European markets. Moreover, China has the potential to catch up with other Asian countries like Japan and Korea. 

Here are all the topics covered in China's Video Game Market: Facts & Stats PDF Report:

• Where to Buy Games: The world of alternative marketplaces
• Free Games With Huge Earnings
• Difficulties for Chinese Developers: Peculiarities of State Regulation
• The Chinese Investment Market Is Becoming Less Saturated
• Cloud Gaming and 5G Thrive