Even the restriction of game license releasing in China started from March 2018, the revenue and user base of China game market are still growing. A recent report from GPC and CNG reveals that the actual sales revenue of China game market reaches 15.18 billion USD, increased 5.2% compared to last year.
Actual Sales Revenue of China Game Market (Source: GPC and CNG)
Mobile game segment, among all the segments, generated 9.17 billion USD and shared 60.4% of the total revenue. Client game segment generated 4.56 billion USD, sharing 30.0% of the total. Browser game segment’s revenue reached 0.33 billion USD, or 2.2% of the total. Console game segment, 0.06 billion USD and 0.4%.
China Game Market Distribution by Segments (Source: GPC and CNG)
Number of Game Players in China (Source: GPC and CNG)
Actual Sales Revenue of China Domestic-Developed Game Market (Source: GPC and CNG)
The number of game players in China increased 4.0% compared to last year, reached 0.53 billion. Domestic-developed games generated 11.54 billion USD, increased by 15.1%. By June 2018, 188 of game companies in China are listed, 80.3% of which are listed in China, 13.8% in HK, and only 5.9% in US. Apparently, game companies are more interested to be listed in China stock market, mainly because the price multiples in US is much lower than China or HK stock market.
Overall, in the first half of year 2018, China game market still seems strong. The market share ranks No.1 globally and reached 26.1%. With a closer look though, the growth compared to last year is 5.2%, which is not a quite high number with the fact that the growth rates of the past three years were 21.9%, 30.1%, and 26.7%. This year the growth rate actually dropped dramatically. The restriction of license releasing is one of the major factor caused the decrease, along with other main reasons such as saturation of new mobile user base and fierce local competitions. Many big game companies in China like Tencent, which decreased 19% of mobile game revenue in Q2, are impacted. The reasons behind the restriction varies, one of them is the restructure of relevant government agency.
Due to the license restriction, many small game companies and indies have their products stuck in the middle of the process which means they have to continue burning money without revenue, so that the companies can hardly survive. While it is difficult for them, the coin has its positive side as long as the government agency resumes eventually, since this is a good chance to make the China game industry grow healthier.
Previously, almost any games in China can easily become successful. Copy cats survived, low quality games flooded the market, and good teams with high quality products are demotivated. Now, only great games from companies who are really serious and focus on great game can survive from the restriction and succeed.
On the other hand, this is urging qualified China game companies to enter overseas market, as there is a massive land out there for China game companies to explore and grow.
Markets China Game Companies Listed (Source: GPC and CNG)
From the report, in overseas market, domestic-developed games from China were quite impressive, generating 0.67 billion USD and increased 16% compared from last year. Not only domestic-developed games started to broaden their influence in the global game market, but the game companies and products in China are also leading the iteration of product types of mobile games.
Esports is another area for China game companies to grow.
The report also pointed out that the actual sales revenue of Esports market in China reached 6.05 billion USD, increased 16.1% compared from last year, while the growth of mobile Esport was outstanding and surpassed client Esport. The growth of client Esport is 4.8%, with 2.78 billion USD revenue.
Actual Sales Revenue of China Esports Market (Source: GPC and CNG)
We have to keep a close eye on how the restriction of license releasing goes. Hopefully it will get resolved very soon. I can foresee some good companies in China will speed up to sail overseas and allocate more resources into Esport. These trends are not purely pushed by the restriction, but also naturally resulted from market saturation and fierce competition.
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