China’s Video Games Market Shows Signs of Recovery, Domestic Sales Surpass $42.6 Billion

China's Video Games Market Shows Signs of Recovery, Domestic Sales Surpass $42.6 Billion
An advertisement for Genshin Impact in the Akihabara district of Tokyo (Credit: Noriko Hayashi/The New York Times)

Resurgence of China’s Gaming Industry

China’s video game industry has bounced back impressively, witnessing a substantial 13% surge in domestic revenue, hitting a noteworthy 303 billion yuan (equivalent to $42.6 billion). This noteworthy accomplishment signifies a notable recovery from Beijing’s strict 8-month intervention two years ago, putting concerns regarding gaming addiction firmly in the rearview.

At a conference held in Guangzhou last Friday, the China Game Industry Promotion Committee (CGIGC) declared a historic milestone: the domestic revenue of the gaming industry in China for this year has breached the 300 billion yuan mark for the first time. The count of gamers in China has concurrently reached an all-time high of 668 million, demonstrating a 0.61% growth, surpassing the entire population of North America.

This turnaround bears significant importance for the global gaming landscape, particularly as the largest gaming market in the world faced a decline in revenue for the first time last year due to the stringent measures imposed by Beijing. The focus on achieving self-sufficiency in technology has been a driving force behind the surge in games developed within China. Annual revenue from these domestic games has soared to 256 billion yuan, marking a noteworthy 15% increase from the preceding year.

Impact of Global Expansion and Competition

Despite the strength shown in the domestic market, Chinese games faced challenges in foreign markets. Increased scrutiny in countries like India, citing national security concerns, resulted in a 5.65% decrease in China’s overseas games revenue, totaling $16.3 billion in 2023.

It’s worth noting that anime-style games from China, such as miHoYo’s “Genshin Impact,” gained significant popularity, playing a pivotal role in the overall revenue boost. Additionally, anime-style games on smartphones experienced an impressive 31% growth, reaching 31 billion yuan this year compared to the previous year.

The revival of China’s gaming industry is clearly visible in the performance of gaming giants Tencent and NetEase. Tencent, which faced its first-ever revenue decline last year, successfully returned to growth in 2023. Similarly, NetEase had a robust year, with its shares witnessing a remarkable increase of over 40%, driven by the success of gaming titles like “Egg Party.” This resurgence signals a positive trajectory for China’s gaming landscape, overcoming previous challenges and fostering growth in both domestic and international markets.

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Source(s): Reuters

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