Has the Chinese gaming industry made its way back into “The Game”?

Has the Chinese gaming industry made its way back into “The Game”?

China – The center of global gaming 

China holds the title of the ‘Gaming Industry Capital of the World,’ representing about 25% of the global video game industry. Online games in China are played over the Internet through video game consoles, personal computers (PCs), and mobile devices. They often feature multiplayer modes, downloadable content, and in-game chat, available either for free, on a fee basis, or through subscription models.

The enormous market has also attracted international companies to the vast market. While most games in China come from local developers, the number of international game developers is also growing.

But what happened in 2022? – The year of struggle for the gaming industry

2022 proved to be a challenging year for those working in the gaming industry. Covid-19 and its subsequent restrictions played a crucial role in China’s economy, and the market quickly became inaccessible for many international companies, including the gaming industry.

Meanwhile, there were two other factors that may have had an even greater impact on what seemed to be a market that could only grow in one direction, upwards. These two factors were:

  • Governmental suspended gaming licenses.
  • Implemented restrictions on gaming time for minors across the country.

To introduce a video or mobile game in China, approval and permission from the authorities are required. The agency responsible for issuing licenses is The National Press and Publication Administration (NPPA). In 2018 and most recently in 2021, new licenses were temporarily halted, severely impacting both local and international game developers.

For 2022 the Revenues declined for three consecutive quarters, and major players like Blizzard closed its services in China. Additionally, Chinese gaming company Lilith disbanded its entire team for the fantasy mobile game, Art of Conquest 2.

Another factor was that China’s major tech company, including gaming giant Tencent, has faced intense regulatory scrutiny in the past two years due to the government’s efforts to reform the private sector. These regulatory actions led to a significant decline in their collective market value.

Signs of business as usual again

Despite these setbacks, there is hope for al gaming enthusiasts as Covid-19 restrictions eases in China.

And towards the end of 2022, the NPPA opened up for new licenses, and today, the licensing process is largely back to normal.

The country still holds the title of the largest e-sports market globally. China Online Game Market is projected to reach US$ 90.52 Billion by 2027, with a Compound Annual Growth Rate (CAGR) of 8.45%. As of 2022, China boasts over 701.8 Million gamers, solidifying its position as the world’s largest market for video games.

New York Times

How do brands use the hype of “Gaming”?

Numerous Luxury Brands including Gucci, Balenciaga, Hermes, and the cosmetic brand MAC, are a few examples of Brands creating games or collab with a gaming company in their marketing. MAC and Burberry have for example used characters from the popular mobile game Honor of Kings in their campaigns.

Including gaming in the marketing could be a smart way to attract the younger luxury shopper.

Indeed, gamification can serve as an educational approach to garner attention and build brand awareness in various industries. Moreover, it is well-received and embraced in China.

MAC Cosmetic

Is the female audience driving the industry back on track?

Equality is, as NBH has previously written about, a growing topic within the Chinese societal debate. Today, women are the target audience that is growing the most within the gaming market in China. Statistics show that half of China’s over 700 million online gamers are women. This doesn’t only challenges the “nerd” stereotype of gaming but also prompts us to consider the types of games that will gain popularity in upcoming years.

Is it possible to get a license as an international game developer?

Getting approval to release your product in China can be challenging but not impossible. If you succeed in launching your product on the Chinese market, the sheer number of active players makes the potential upside enormous.

Here are examples of companies that already have products in the Chinese gaming market:

  • Rovio Entertainment: Rovio is a well-known Finnish game developer and creator of the hugely popular mobile game, Angry Birds. They have localized and launched various versions of Angry Birds in China.
  • Ubisoft (France): Ubisoft is a well-known game developer and publisher from France. They have released popular titles like Assassin’s Creed series, Just Dance, and Watch Dogs in China.
  • CD Projekt Red (Poland): CD Projekt Red, based in Poland, is famous for creating The Witcher series. Their games have been introduced to the Chinese market through distribution partnerships.
  • Mojang Studios (Sweden): Mojang Studios, based in Sweden, is the developer behind the immensely popular game Minecraft. Minecraft has a significant presence in China, and they have adapted the game to suit the local audience.

Do you have a product you want to market in China?

With our expertise in Chinese online consumer behavior, we help to position global brands on the Chinese digital market. We enable brands to become top of mind in their specific industry and specified target audience.

All activities are done to support brands reaching their goals and deliver measurable business objectives through digital marketing in China.